Holmdel Township Board of Education Monmouth County, New ...

Holmdel Township Board of Education Monmouth County, New Jersey

Comprehensive Annual Financial Report

Year Ended June 30, 2020

HOLMDEL TOWNSHIP SCHOOL DISTRICT

HOLMDEL TOWNSHIP BOARD OF EDUCATION

HOLMDEL TOWNSHIP, NEW JERSEY

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2020

PREPARED BY DISTRICT FINANCE OFFICER

SCHOOL BUSINESS ADMINISTRATOR/BOARD SECRETARY MICHAEL PETRIZZO

Table of Contents

Page INTRODUCTORY SECTION

Letter of Transmittal 1 Organization Chart 5 Roster of Officials 6 Independent Auditors and Advisors

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FINANCIAL SECTION

Independent Auditors’ Report 8 Required Supplementary Information – Part I

Management’s Discussion and Analysis 11 Basic Financial Statements

Government-wide Financial Statements:

A-1 Statement of Net Position 20 A-2 Statement of Activities 21

Fund Financial Statements:

Governmental Funds:

B-1 Balance Sheet 22 B-2 Statement of Revenues, Expenditures, and Changes in Fund Balances 23 B-3 Reconciliation of the Statement of Revenues, Expenditures and

Changes in Fund Balances to the Statement of Activities

24

Proprietary Funds: B-4 Statement of Net Position 25 B-5 Statement of Revenues, Expenses, and Changes in Net Position 26 B-6 Statement of Cash Flows

27

Fiduciary Funds: B-7 Statement of Fiduciary Net Position 28 B-8 Statement of Changes in Fiduciary Net Position 29

Notes to the Basic Financial Statements 30

Table of Contents

(continued)

FINANCIAL SECTION (continued) Page

Required Supplementary Information – Part II Pension Schedules: Schedule of the District’s Proportionate Share of the Net Pension Liability – Public Employees’ Retirement System (PERS) And Notes to Required Supplementary Information 70 Schedule of District Contributions – Public Employees’ Retirement System (PERS) 71Schedule of the State’s Proportionate Share of the Net Pension Liability Associated with the District – Teacher’s Pension and Annuity Fund (TPAF) and Notes to Required Supplementary Information 72

OPEB Schedules: Schedule of State’s Proportionate Share of the OPEB Liability Associated with the District – State Health Benefit Local Education Retired Employees Plan Required Supplementary Information – Part III

73

Budgetary Comparison Schedules:

C-1 Budgetary Comparison Schedule (Budgetary Basis) – General Fund

74

C-2 Budgetary Comparison Schedule (Budgetary Basis) – Special Revenue Fund

82

C-3 Note to Required Supplementary Information – Budget to GAAP Reconciliation

83

Supplementary Information

Special Revenue Fund:

E-1 Combining Schedule of Program Revenues and Expenditures – Budgetary Basis

84

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Table of Contents

(continued)

Supplementary Information (continued) Page Capital Projects Fund:

F-1 Summary Schedule of Project Revenues, Expenditures, Project Balance and Project Status (Budgetary Basis)

87

F-1a to F-1i

Schedule(s) of Project Revenues, Expenditures, and Changes in Fund Balance, and Project Status (Budgetary Basis)

88

F-2 Summary Schedule of Project Expenditures (Budgetary Basis) 97

Enterprise Funds: G-1 Combining Statement of Net Position N/A G-2 Combining Statement of Revenues, Expenses and Changes in

Net Position

N/A G-3 Combining Statement of Cash Flows N/A

Internal Service Funds:

G-4 Combining Statement of Net Position N/A G-5

G-6

Combining Statement of Revenues, Expenses, and Changes in Net Position Combining Statement of Cash Flows

N/A N/A

Fiduciary Funds:

H-1 Combining Statement of Fiduciary Net Position 98 H-2 Combining Statement of Changes in Fiduciary Net Position 99 H-3 Statement of Cash Receipts and Cash Disbursements –

Student Activity Agency Fund

100 H-4 Statement of Cash Receipts and Cash Disbursements – Payroll

Agency Fund

101 H-5 Statement of Cash Receipts and Cash Disbursements – Bond and

Interest Agency Fund

N/A Long-Term Debt:

I-1 Schedule of Serial Bonds Payable 102 I-2 Schedule of Obligations Under Capital Leases 103 I-3 Budgetary Comparison Schedule – Debt Service Fund 104

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Table of Contents (continued)

STATISTICAL SECTION (Unaudited) – Other Information

Page

Financial Trends: J-1 Net Position by Component 106 J-2 Changes in Net Position 107 J-3 Fund Balances– Governmental Funds 109 J-4 Changes in Fund Balances – Governmental Funds 110 J-5 General Fund – Other Local Revenue by Source 111

Revenue Capacity: J-6 Assessed Value and Actual Value of Taxable Property 112 J-7 Property Tax Rates – Direct and Overlapping Governments 113 J-8 Principal Property Tax Payers 114 J-9 Property Tax Levies and Collections 115

J-10 J-11

Ratios of Outstanding Debt by Type Ratios of Net General Bonded Debt Outstanding

116 117 118 J-12 Direct and Overlapping Governmental Activities Debt

J-13 Legal Debt Margin Information 119 Demographic and Economic Information: J-14 Demographic and Economic Statistics 120 J-15 Principal Employers

Operating Information: 121

J-16 Full-Time Equivalent District Employees by Function/Program 122 J-17 Operating Statistics 123 J-18 School Building Information 124 J-19 Schedule of Required Maintenance for School Facilities 125 J-20 Insurance Schedule 126

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SINGLE AUDIT SECTION Page

K-1 Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards

127 K-2 Report on Compliance for Each Major Federal and State Program

and Report on Internal Control Over Compliance Required by OMB Uniform Guidance and New Jersey OMB 15-08

129 K-3 Schedule A – Schedule of Expenditures of Federal Awards –


132 K-4 Schedule B – Schedule of Expenditures of State Financial

Assistance – Supplementary Information

133 K-5

K-6

Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance

Schedule of Findings and Questioned Costs Section I – Summary of Auditors’ Results Section II – Financial Statement Findings Section III – Federal Awards and State Financial

Assistance Findings and Questioned Costs

134 137

K-7 Summary Schedule of Prior Year Audit Findings 140

Note: The schedules denoted with N/A are not applicable in the current year. However, the New Jersey Department of Education requires the District to reference all schedules included in its sample Comprehensive Annual Financial Report.

Introductory Section

HOLMDEL TOWNSHIP PUBLIC SCHOOLS “A COMMITMENT TO EXCELLENCE”

February 2, 2021

Honorable President and Members Of the Board of Education Holmdel School District County of Monmouth Holmdel, NJ 07733

Dear Board Members:

The Comprehensive Annual Financial Report (CAFR) of the Holmdel Township Public Schools District (District) for the fiscal year ended June 30, 2020, is hereby submitted. Responsibility for both the accuracy of the data and completeness and fairness of the presentation, including all disclosures, rests with the management of the District. To the best of our knowledge and belief, the data presented in this report is accurate in all material respects and is reported in a manner designed to present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information as of June 30, 2020, and the respective changes in financial position and cash flows, for the year then ended. All disclosures necessary to enable the reader to gain an understanding of the District’s financial activities have been included.

The introductory section includes this transmittal letter (designed to complement management’s discussion and analysis and should be read in conjunction with it), the District’s organizational chart, roster of officials, and consultants and advisors. The financial section includes the independent auditor’s report, management’s discussion and analysis, basic financial statements, required supplementary information, and other supplementary information. The statistical section includes selected financial trends, revenue and debt capacity, demographic, and economic information, generally presented on a multi-year basis and is unaudited. The District is required to undergo an annual Single Audit in conformity with the provisions of the Single Audit Act Amendments of 1996, the Federal Uniform Guidance and the New Jersey OMB Circular 15-08, “Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid”. Information related to this Single Audit, including this independent auditor’s report on the internal control and compliance with applicable laws, regulations, contracts and grants, along with findings and recommendations, if any, are included in the Single Audit Section of this report.

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REPORTING ENTITY AND ITS SERVICES The District is an independent reporting entity within the criteria adopted by the Governmental Accounting Standard Board (GASB) as established by GASB Statement No. 14. All funds of the District are included in this report. The District provides a full range of educational services appropriate to grade levels Pre-K through 12. These include general and vocational education as well as special education programs and services for students with disabilities. The District is comprised of two elementary schools, one middle school and one high school. The District’s full-time student enrollment as of October 15, 2019 was 2,987. ECONOMIC CONDITION AND OUTLOOK The District’s tax base is expected to remain stable due to its above-average wealth levels and continued development. The tax level has incrementally increased in recent years due to flat state aid funding in prior years along with unfunded state mandates. The District is required to meet federal and state student learning standards and special education requirements. The District has mitigated reliance on local property taxes by increasing revenue through enterprise fund initiatives and continued savings from energy conservation programs, and federal, state and county purchasing consortiums. The District anticipates maintaining its stable financial position given ongoing expenditure management, moderate but consistent increases, and forward-looking financial planning. MAJOR INITIATIVES The Holmdel Township community approved the District’s Holmdel 2020 Initiative at the September 26, 2017 special election. This $40.3 million school referendum project focused on academic, athletic and infrastructure improvements to all four schools, but the greatest enhancement was the expansion and renovation of the middle and high school into a state-of-the-art 7th-12th grade facility that supports the transformation of the adolescents who enter it as 7th graders into future-ready young adults. The Holmdel 2020 Initiative allowed the District to create a more appropriately flexible, student-centered, technology rich complex that will inspire and promote innovation at every turn, optimize the pace and focus of learning for all students and maintain our community’s commitment to excellence in academics, athletics and the arts. During the 2019-2020 school year, despite unprecedented challenges, the District continued implementation of the referendum projects. On October 1, 2020, the community celebrated the successful completion of the Holmdel 2020 Initiative, on time and on budget. Due to the pandemic, the District was required to shut down in March 2020 with all students going to a full remote learning model for the remainder of the 2019-2020 school year. The District partnered with Spiezle Architectural Group, Inc. and Greyhawk Construction Management and Consulting to conduct a district wide re-occupancy assessment in response to the COVID-19 outbreak and reopening of the District schools in September 2020. As a result, the District implemented the following measures: UV-C lighting for disinfecting after hours; bipolar ionization filtration units in HVAC systems; site signage, parking limitations and signage at school entries; thermal temperature detection devices at entries; physical barriers (such as sneeze guards) at vestibules, main and nurse offices; antimicrobial coatings on commonly used surfaces (such as doorknobs, push bars, railings, bathroom fixtures and playground equipment); directional decals on floors to separate hallways and indicate directions of travel for students, teachers and visitors; hand sanitizer dispensers in each classroom and key locations; adjusting the spacing of classroom and nurse office furniture for physical distancing; maintaining new, enhanced cleaning procedures; urinal partitions in men’s and boy’s restrooms; automatic paper towel and soap dispensers; providing the necessary and appropriate PPE; Retro-commissioning the District HVAC systems.

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INTERNAL ACCOUNTING CONTROLS Management of the District is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the district are protected from loss, theft and misuse and to ensure that adequate accounting data are completed to allow for the preparation of financial statement in conformity with general accepted accounting principles (GAAP). The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be delivered; and (2) the valuation of costs and benefits require estimates and judgements by management. As a recipient of federal awards and state financial assistance, the District also is responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is also subject to periodic evaluations by the District management. As part of the District’s single audit described earlier, tests are made to determine the adequacy of the internal control structure, including that portion related to federal and state financial assistance programs, as well as to determine that the District has complied with applicable laws and regulations. BUDGETARY CONTROLS In addition to internal accounting controls, the District maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the state. Annual appropriated budgets are adopted for the general fund, the special revenue fund, and the debt service fund. Project-length budgets are approved for capital improvements accounted for in the capital projects fund. The final budget amount as amended for the fiscal year is reflected in the financial section. An encumbrance accounting system is used to record outstanding purchase commitments on a line item basis. Open encumbrances at year-end are either cancelled or included as re-appropriations of fund balance in the subsequent year. ACCOUNTING SYSTEM AND REPORTS The District’s accounting records reflect generally accepted accounting principles, as promulgated by the Governmental Accounting Standards Board (GASB). The District’s accounting system is organized on the basis of funds. The funds and the government-wide financial statements are explained in “Notes to Financial Statements”, Note 1. FINANCIAL POLICIES The intent of the School Board is to ensure that the District manages its budget and finance in a fiscally prudent and responsible way by establishing policies for the Budget, Fund Balance and the maintenance of adequate reserves. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when the liability is incurred. Governmental fund financial statements are reported using the current financial resources measurement of focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues, except for certain grant revenues, are recognized when susceptible to accrual that is when they become measurable and available. Property taxes, interest and certain General Fund revenues are the significant revenue sources considered susceptible to accrual.

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OTHER INFORMATION INDEPENDENT AUDIT

State statutes require an annual audit by independent certified public accountants. The accounting firm of PKF O’Connor Davies, LLP, Certified Public Accountants, was appointed by the Board of Education. In addition to meeting the requirements set forth in the State Statutes, the audit was also designed to meet the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and New Jersey OMB’s Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. The auditor’s report on the basic financial statements and combining statements and related major fund supporting statements and schedules are included in the financial section of this report. The auditor’s reports related specifically to the single audit are included in the Single Audit section of this report.

ACKNOWLEDGMENTS We would like to express our appreciation to the members of the Holmdel Board of Education for their efforts in ensuring fiscal responsibility to the citizens and taxpayers of the District and thereby contributing their full support to the development and maintenance of our financial operation. The preparation of this report could not have been accomplished without the efficient and dedicated services of our business office staff.

Respectfully Submitted,

Dr. LeRoy Seitz Michael R. Petrizzo, CPA Interim Superintendent of Schools Business Administrator/Board Secretary

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Board Secretary M. Petrizzo

Assistant Board Secretary J. DeWysockie

Board of Education

Board Attorney Schenck Price Smith & King, LLP

Board Auditor PKF O’Connor Davies, LLP

Superintendent of Schools L. Seitz (7/1/2020 to present)

R. McGarry (through 6/30/2020)

Business Administrator M. Petrizzo

Assistant Business Administrator J. DeWysockie

Director of Curriculum and Instruction

D. Seeley

Confidential Office Service

Personnel

Custodial Personnel

HOLMDEL TOWNSHIP BOARD OF EDUCATION ORGANIZATIONAL CHART

¶

Direct Reporting

Board Members Secondary Reporting V. Flynn, President, M. Sockol, Vice President

E. Briamonte, J. Collins, B. Foster, J. Hammer, P. Reddy, E. Urbanski, T. Wall

Curriculum and Instruction Function

Director of Human Resources and Compliance

M. Peart


Personnel

Director of Plant, Operations & Maintenance

K. Stromsland

Assistant to Director of Plant, Operations &

Maintenance S. Rogers


Personnel

Contracted Caterer

Chartwells

School Counseling

Function

Plant, Operations & Maintenance

Office Service P l

Director of Technology A. Gattini

Supervisors

S. Fallon, PE A. Killean, M/S

A. Farese, Humanties R. Fittipaldi, P-3

C. MacConnell, T, E&M D. Wrubel, G&T/

Supplemental Programs

Special Services Function

Network Eng.

S. Lelivelt

Desktop Support

Licensed Electrician K. Hughes

Grounds Personnel

Maintenance Personnel

Head Custodians T. Paul, VS

R. Errickson, IH T. Dandorph, WRS

M. Norton, HHS

Contracted Bus Routes

Transportation Office Service

Personnel

Office Service

Personnel

Supportive Professionals:

Librarians Nurses

Schedule B Personnel

Teachers Teachers of Special Education/ Related

Services

Child Study Team


Personnel

Building & Grounds Function

Transportation Function

Business Office

Function

Food Services Function

Director of School

Counseling Services

E. Swensen

Principals & Assistant Principals

A. Howard, VS J. Vierschilling, VS

L. Marino, IH M. Ferrarese, IH

W. Loughran, WRS C. Simonelli, WRS

B. Schillaci, HHS J. Brown, HHS J. Riggi, HHS

Confidential Office Service Personnel Director of

Special Services M. Gill

Supervisor of Special Services

E. Wright

Personnel Function

Policy Function

School Counselors

Director of Community Programs &

Student Transportation

L. Carducci

Enterprise Programs Function

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Holmdel Township School District Holmdel, New Jersey

Roster of Officials

June 30, 2020

Members of the Board of Education Term Expires

Ms. Vicky Flynn, President 2021

Mr. Michael Sockol, Vice President 2022

Ms. Eileen Briamonte 2020

Ms. Jamie Collins 2020

Mr. Brian Foster 2021

Mr. Joseph Hammer 2022

Mr. Peter Reddy 2020

Ms. Elizabeth Urbanski 2022

Mr. Terence Wall 2021

Other Officials

Dr. LeRoy Seitz, Interim Superintendent of Schools (July 1, 2020 to present)

Dr. Robert McGarry, Superintendent of Schools (through June 30, 2020)

Mr. Michael R. Petrizzo, School Business Administrator/ Board Secretary

Mr. Paul H. Green, Attorney, Schenck, Price, Smith & King

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Holmdel Township School District Holmdel, New Jersey

Consultants and Advisors June 30, 2020

Independent Auditors

PKF O'Connor Davies, LLP

20 Commerce Drive

Suite 301

Cranford, New Jersey 07016

Attorney

Paul H. Green

Schenck, Price, Smith & King LLP

220 Park Avenue, P.O. Box 991

Florham Park, New Jersey 07932

Official Depository

Bank of America

Hazlet Branch, Route 35

Hazlet, New Jersey 07730

Architect of Record

Spiezle Architectural Group

1395 Yardville Hamilton Square Road

Hamilton Township, New Jersey 08691

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Financial Section

PKF O’CONNOR DAVIES, LLP 20 Commerce Drive, Suite 301, Cranford, NJ 07016 I Tel: 908.272.6200 I Fax: 908.272.2416 I www.pkfod.com

PKF O’Connor Davies, LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

Independent Auditors’ Report

The Honorable President and Members of the Board of Education Holmdel Township School District County of Monmouth Holmdel, New Jersey

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the Holmdel School District, in the County of Monmouth, State of New Jersey (the “District”), as of and for the year ended June 30, 2020 and the related notes the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey. Those standards and requirements require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we express no such opinion.

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The Honorable President and Members of the Board of Education Holmdel Township School District

Page 2

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the District as of June 30, 2020, and the respective changes in financial position, and, where applicable, cash flows, thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that management’s discussion and analysis, schedule of the District’s proportionate share of the net pension liability-PERS, schedule of District contributions-PERS, schedule of the State’s proportionate share of the net pension liability associated with the District-TPAF, schedule of State’s proportionate share of the OPEB liability associated with the District, and budgetary comparison information as presented in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The introductory section, combining and individual fund financial statements, long-term debt schedules and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements.

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Page 3

The schedules of expenditures of federal awards and state financial assistance are presented for purposes of additional analysis, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid, respectively, and are also not a required part of the basic financial statements.

The combining and individual fund financial statements and long-term debt schedules and the schedules of expenditures of federal awards and state financial assistance are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements, long-term debt schedules and the schedules of expenditures of federal awards and state financial assistance are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated February 4, 2021 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

February 2, 2021 Cranford, New Jersey

Michael Andriola, CPA Licensed Public School Accountant No. 2429

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Required Supplementary Information – Part I

Management’s Discussion and Analysis

Holmdel Township School District

Management’s Discussion and Analysis


As management of the Holmdel Township Public Schools District (the “District”), we offer readers of the District’s financial statements this narrative discussion, overview, and analysis of the financial activities of the District for the fiscal year ended June 30, 2020. We encourage readers to consider the information presented, in conjunction with additional information that we have furnished in our letter of transmittal. Management’s Discussion and Analysis (MD&A) is Required Supplementary Information specified in the Governmental Accounting Standard Board’s (GASB) Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. Certain comparative information between the current fiscal year (2019-2020) and the prior fiscal year (2018-2019) is presented in the MD&A. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements. The District’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This document also contains required and other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the assets, deferred outflows of resources, deferred inflows of resources and liabilities of the District, with the difference between the four reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The statement of activities presents information showing how the net position of the District changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. The government-wide financial statements can be found on pages 20 - 21 of this report. Fund financial statements. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the District can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating government’s near-term financing requirements.

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Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The District maintains four individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, special revenue fund, capital projects fund and debt service fund, all of which are considered to be major funds. The District adopts an annual appropriated budget for its general fund, special revenue fund and debt service fund. Budgetary comparison statements have been provided as required supplementary information for the general fund and special revenue fund to demonstrate compliance with this budget and supplementary information for the debt service fund. The basic governmental fund financial statements can be found on pages 22 - 23 of this report. Proprietary funds. The District maintains four proprietary fund types. Proprietary funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The District uses enterprise funds to account for the operations of its food service and childcare programs both of which are considered major funds of the District. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The basic proprietary fund financial statements can be found on pages 25 - 27 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the governmental entity. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the District’s own programs. The District uses agency funds to account for resources held for student activities and groups, and payroll related liabilities. The District also has an unemployment compensation fund and a private-purpose scholarship fund. The basic fiduciary fund financial statements can be found on pages 28 - 29 of this report. Notes to the basic financial statements. The notes provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 30 - 69 of this report. Other information. The combining statements referred to earlier in connection with governmental funds, and enterprise funds are presented immediately following the notes to the basic financial statements. Combining and individual fund statements and schedules can be found on pages 74 – 101 of this report.

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Financial Highlights Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. The following table provides a summary of net position relating to the District’s governmental and business-type activities at June 30, 2020 and 2019:

Business Business

Governmental Type- Governmental Type-Activities Activities Total Activities Activities Total

Current and other assets $ 26,278,797 $ 606,809 $ 26,885,606 $ 40,590,559 $ 695,434 $ 41,285,993

Capital assets, net 78,072,203 89,693 78,161,896 61,387,365 48,559 61,435,924

Total assets 104,351,000 696,502 105,047,502 101,977,924 743,993 102,721,917

Deferred outflows 4,223,893 4,223,893 6,182,436 6,182,436

Deferred charge on refunding debt 21,605 21,605

4,223,893 4,223,893 6,204,041 6,204,041

Liabilities

Current liabilities 6,837,628 92,744 6,930,372 2,494,001 54,981 2,548,982

Net pension liability 18,958,369 18,958,369 20,743,837 20,743,837

Long-term liabilities 43,008,663 43,008,663 48,128,357 48,128,357

Total liabilities 68,804,660 92,744 68,897,404 71,366,195 54,981 71,421,176

Deferred inflows 7,226,296 7,226,296 7,237,276 7,237,276

Net position

Net investment in capital

assets 46,106,571 89,693 46,196,264 44,421,713 48,559 44,470,272

Restricted 6,232,782 6,232,782 5,231,957 5,231,957

Unrestricted (deficit) (19,795,416) 514,065 (19,281,351) (20,075,176) 640,453 (19,434,723)

Total net position $ 32,543,937 $ 603,758 $ 33,147,695 $ 29,578,494 $ 689,012 $ 30,267,506

2020 2019

Key financial highlights for the 2019-2020 fiscal year include the following:

Governmental net position increased $2,965,443. A significant reason for the increase in

net position was attributable to $16,684,838 in capital asset additions for various projects, net of current year depreciation expense. Specifically, the District had $815,476 in lease proceeds to fund equipment as well as 2018 bond proceeds that contributed to Construction

in Progress asset additions for Educational, Athletic & Infrastructure Improvements. This was offset by a decrease in the measured net pension liability of $1,785,468 and a decrease in long-term liabilities of $5,119,694.

Consistent with the prior year, the State withheld the school district’s fiscal 2019-2020 last two state aid payments until July 2020.

The increase in governmental assets in the amount of $2,373,076 is primarily driven by net effect of the acquisition of capital assets in the amount of $16,684,838, net of current

year depreciation expense offset by a correlated decrease in full accrual unrestricted governmental cash from the prior year in the amount of $14,050,553. Full accrual unrestricted governmental cash stated in the current year’s statement of net position

page (20) is $16,616,796 compared to $30,667,349 at June 30, 2019.

13

Significant changes to deferred outflows and deferred inflows of resources pertain primarily to the impact of the changes in the GASB 68 net pension liability calculation

performed by the State of New Jersey. The changes for the year ended June 30, 2020 from the prior year resulted from adjustments in assumptions calculated by the actuary in conjunction with the net pension liability calculation for the measurement date of June 30,

2018 and rolled forward to June 30, 2019. The net pension liability associated with the District’s governmental activities at June 30,

2020 amounted to $18,958,369, which decreased by $1,785,468 from the prior year. Long-term liabilities mainly decreased by principal payments made in the amount of $2,415,000 in bonds payable and $425,000 in capital leases payable.

The largest portion of the District’s net position is net investment of capital assets of $46,106,571 which results primarily from debt proceeds obtained to fund Capital Projects.

An additional portion of the District’s net position (restricted) represents resources that

are subject to external restrictions on how they may be used, including funds reserved for

future maintenance service, capital reserve, excess surplus and capital projects. Restricted net position increased by $1,000,825 during the year ended June 30, 2020 mainly due to deposits into the maintenance and capital reserves totaling $937,345.

Additionally, there was an increase in restricted for debt service, which was offset by the prior year restricted amount of $1,000,000 that was designated for expenditures during the 2019-2020 year.

The deficit (negative) balance of governmental unrestricted net position in the amount of

($19,795,416) is mainly the result of liabilities for compensated absences and the net

pension liability without an offsetting asset.

14

District activities. The key elements of the District’s changes in net position for the years ended June 30, 2020 and 2019 are as follows:

Governmental and business-type charges for services revenue decreased approximately $1,200,000 in total compared to the prior year, due to tuition charges no longer owed to the District due to the COVID-19 pandemic. The COVID-19 pandemic also strongly impacted expenditures. Specifically, certain school wide projects that were scheduled to commence in the early spring of 2020 were delayed during the declared emergency. Although expenditures were quickly reallocated to technology and to support remote learning, many general school wide expenditures such as, repairs, professional services, etc. all came to an abrupt halt as a direct result of the impact of COVID-19. Property tax revenue increased $1,686,110 due to the Holmdel 2020 school wide initiative, which included a series of scheduled school improvements to buildings, athletic areas and technology in the classrooms. The overall total decrease from 2018-2019 to 2019-2020 in state and federal aid was $5,598,140. This significant decrease was primarily driven by changes in assumptions and other variables including mortality rates and discount rates in the actuarial GASB 68 and 75 calculations. Financial Analysis of the District’s Funds As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District’s financing requirements. The District’s fund balance amounts are classified as either restricted, committed, assigned or unassigned.

Business BusinessGovernmental Type- Governmental Type-

Activities Activities Total Activities Activities TotalRevenues:Program revenues:

Charges for services $ 283,048 $ 1,067,499 $ 1,350,547 $ 501,246 $ 2,094,137 $ 2,595,383 Operating grants and contributions 1,854,180 1,854,180 1,635,067 1,635,067 Capital grants and contributions 8,000 8,000

General revenues: Property taxes 58,583,272 58,583,272 56,897,162 56,897,162 State and federal aid not restricted to a specific purpose 12,869,261 12,869,261 18,467,401 18,467,401 Interest income 554,642 554,642 738,544 738,544 Miscellaneous 151,638 30,629 182,267 253,833 29,764 283,597

Total revenue 74,296,041 1,098,128 75,394,169 78,501,253 2,123,901 80,625,154

Expenses:Instructional services 41,543,568 41,543,568 45,123,562 45,123,562 Support services 28,376,664 28,376,664 30,229,330 30,229,330 Interest on long term debt 1,410,366 1,410,366 1,422,833 1,422,833 Business Type Activities 1,183,382 1,183,382 1,993,923 1,993,923

Total expenses 71,330,598 1,183,382 72,513,980 76,775,725 1,993,923 78,769,648

Increase (decrease) in net position 2,965,443 (85,254) 2,880,189 1,725,528 129,978 1,855,506 Transfers - - - 1,500,000 (1,500,000) - Change in net position 2,965,443 (85,254) 2,880,189 4,596,619 22,202 1,855,506

Net position–beginning 29,578,494 689,012 30,267,506 26,352,966 2,059,034 28,412,000 Net position–ending $ 32,543,937 $ 603,758 $ 33,147,695 $ 29,578,494 $ 689,012 $ 30,267,506

2020 2019

15

As demonstrated by the various statements and schedules included in the financial section of this report, the District continues to meet its responsibility for sound financial management. The following schedule presents a summary of the General Fund, Special Revenue Fund and Debt Service Fund revenues for the fiscal year ended June 30, 2020, and the increases in relation to the prior year:

Increase Percent of

Percent (Decrease) IncreaseRevenue Amount of Total from 2019 (Decrease)

Local sources $ 59,261,877 80.00% $ 1,568,953 2.72%State sources 13,827,398 18.66% 1,303,473 10.41%Federal sources 995,598 1.34% (8,109) -0.81%Total $ 74,084,873 100% $ 2,864,317 4.02%

The increase in local sources is primarily due to an increase in the tax levy of $1,686,110. As mentioned above, the annual tax increase was predominately the result of the Holmdel 2020 initiative, which included a series of educational, athletic and infrastructure improvements. The increase in state sources is largely a result of the State of New Jersey increasing the amount paid by the State on behalf of the District for TPAF social security, pension, medical and long-term disability contributions of $296,758 as well as current year debt service aid in the amount of $723,575. The following schedule presents a summary of General Fund, Special Revenue Fund and Debt Service Fund expenditures for the fiscal year ended June 30, 2020 and the increases and (decreases) in relation to the prior year:

Increase Percent ofPercent (Decrease) Increase

Expenditures Amount of Total From 2019 (Decrease)

Current expenditures:Instruction 26,635,356$ 37.00% 1,044,176$ 4.08%Support services 40,685,212 56.52% (729,844) -1.76%Capital outlay 741,391 1.03% 92,642 14.28%

Debt service: Principal 2,415,000 3.35% 730,000 43.32%

Interest and Other Charges 1,510,435 2.10% 314,239 26.27%

Total $ 71,987,394 100.00% 1,451,213$ 86.19%

The increase in instruction expenditures is mainly the result of an increase in salaries and wages, the cost of benefits as well as an increase in on-behalf TPAF social security, medical, long-term disability and pension contributions, which is also offset by a correlating revenue source. The net increase in debt service principal and interest expenditures is related primarily to the 2018 bond issuance, as the first principal payment became due during this fiscal year, as well as two interest payments related to this issuance, whereas only one interest payment became due in the prior fiscal year.

16

General Fund

Fund balance in the General Fund increased by $1,376,346. Of the $9,796,645 fund balance in the General Fund, $2,388,313 is restricted in the maintenance reserve, $2,500,000 is restricted for capital reserve, $1,399,573 is assigned for other purposes, $2,110,861 is designated for subsequent year’s expenditures and $1,397,898 is unassigned.

Special Revenue Fund

Expenditures in the Special Revenue Fund remained in line with prior year as the total awards were substantially the same in this and the previous fiscal year.

Capital Projects Fund

The capital projects fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds). The fund balance in the Capital Projects Fund of $14,197,957 is the result of the unspent proceeds from transfers from capital reserve and bond proceeds that are being used for ongoing capital projects throughout the District.

Business-Type Activities. The focus of the District’s business-type activities is to provide information on near-term inflows, outflows, and balances of spendable resources related to the operations of its food service, summer and after-school programs.

As demonstrated by the various statements and schedules included in the financial section of this report, the District continues to meet its responsibility for sound financial management.

The following schedule presents a summary of the Enterprise funds revenues for the fiscal year ended June 30, 2020, and the (decreases) and increases in relation to the prior year:

(Decrease) Percent ofPercent Increase (Decrease)

Revenue Amount of Total from 2019 Increase

Local Sources:Daily Sales $ 949,613 86.47% $ (487,345) -33.92%Tuition 117,886 10.74% (539,293) -82.06%Other 30,629 2.79% 865 2.91%

Total $ 1,098,128 100.00% $ (1,025,773) -48.30% The following schedule presents a summary of the Enterprise fund operating expenses for the fiscal year ended June 30, 2020, and the increases and (decreases) in relation to the prior year:

(Decrease) Percent ofPercent Increase (Decrease)

Expenditures Amount of Total From 2019 Increase

Salaries and benefits $ 192,696 16.28% (426,094)$ -68.86%Purchased professional services 904,919 76.47% (381,049) -29.63%Other purchased service 12,999 1.10% (3,230) -19.90%Supplies and materials 46,266 3.91% 30,704 197.30%Depreciation 13,885 1.17% 3,633 35.44%Utility expense 593 0.05% (14,269) -96.01%Other 12,024 1.02% (20,236) -62.73%

$ 1,183,382 100.00% $ (810,541) -40.65%

17

2020 2019

Land $ 5,122,300 $ 5,122,300 Construction in progress 56,536,820 39,223,568 Buildings and building improvements, net 14,511,110 15,226,900 Machinery, equipment, and vehicles, net 1,901,973 1,814,597 Total capital assets, net $ 78,072,203 $ 61,387,365

June 30,

The decrease in salaries and benefits and professional services is mainly attributable to the COVID-19 pandemic school closures which resulted in reduced operations during the current year. Food Service Fund The food service enterprise fund realized operating revenues of $980,242 and achieved a net profit this year of $14,082. The District experienced a significant decrease in sales due to COVID-19 school shutdowns, but was able to avoid a deficit due to strong controls over expenditures. Total operating expenses decreased from the prior year by $447,656 or 31.66% due to the decrease in cost of sales and supplies realized from March to June 2020 when schools were closed. The net position of the food service fund, $328,001 is comprised of net position - investment in capital assets of $89,693 and unrestricted net position of $238,308. Childcare Programs Fund The Childcare Programs fund realized operating revenue of $117,886 for the year ended June 30, 2020. Current year tuition revenues decreased from the prior year by $539,293 as a result of the reduction of childcare-school program revenue when school was closed due to COVID-19. Meanwhile, operating expenses decreased from the prior year by $362,885 as a result of cost savings that were realized due to the reduced operations. Overall, the fund generated a net operating deficit of $99,336. The fund maintains sufficient cash on hand to ensure the operational requirements of running the program are met at any time. Capital Assets and Debt Administration

Capital Assets. At June 30, 2020, the District’s governmental activities had capital assets of $78,072,203 (net of accumulated depreciation), including land, construction in progress, school buildings, machinery, equipment and vehicles. The District’s governmental funds’ capital assets, net of depreciation consisted of the following at

June 30, 2020 and 2019:

The increase in total capital assets is a result of capital asset additions exceeding depreciation expense during the fiscal year. More detailed information about the District’s capital assets can be found in Note 4 to the basic financial statements.

Debt Administration. As of June 30, 2020, the District had outstanding long-term liabilities of $65,062,459 of which $3,095,427 was classified as the current portion.

18

At June 30, 2020 and 2019, the District’s long-term liabilities consisted of:

Long-term liabilities decreased mainly due to the principal payments made on the bonds and leases, as well as the decrease in the District’s measured net pension liability. More detailed information about the District’s long-term liabilities and outstanding debt can be found in Note 5 to

the basic financial statements. General Fund Budgetary Highlights

The District’s budget is prepared according to New Jersey Statutes. The most significant budgeted fund is the general fund. During the fiscal year, there were several differences between the original budget and the final amended budget as a result of transfers being applied to certain line items.

These transfers were made between line items as part of the normal process as permitted by State guidelines. Readers should refer to Section C of the financial report for comparisons between actual and budgeted amounts. Described below are explanations for variations in realized revenues and expenditures for those lines where the final budgeted amounts differ from the actual amounts by more than $500,000 and 5%. All other fluctuations less than $500,000 and 5% are considered immaterial.

On-behalf TPAF pension, medical, and long-term disability as well as reimbursed social security contributions are unbudgeted revenue sources. Consequently, actual revenues as well as the related expenditures exceeded the final budgeted amount by 100.0%.

Unallocated benefits expenditures were $905,927 less than budgeted, or 6.87% less, due

primarily to savings realized on health insurance costs when the District joined the State Health Benefits insurance plan.

Requests for Information This financial report is designed to provide a general overview of the District’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided

in this report or requests for additional financial information should be addressed to the Office of the School Business Administrator, 65 McCampbell Road Holmdel, NJ 07733.

2020 2019

Bonds payable $ 42,418,000 $ 44,833,000 Unamortized premium on bonds 252,872 351,541 Unamortized premium on leases 73,148 Capital leases payable 2,574,600 2,244,600 Compensated absences payable 785,470 699,216 Net pension liability 18,958,369 20,743,837 Total long-term liabilities $ 65,062,459 $ 68,872,194

June 30,

19

Basic Financial Statements

Government-wide Financial Statements

The government-wide financial statements provide a financial overview of the District’s operations. These financial statements present the financial position and operating results of all governmental activities and business-type activities as of and for the year ended June 30, 2020.

See accompanying notes to the basic financial statements.

A-1

Governmental Business-typeActivities Activities Total

AssetsCash and cash equivalents 16,616,796$ 568,147$ 17,184,943$ Accounts receivable 4,805,308 7,042 4,812,350 Internal balances (31,620) 31,620 - Restricted:

Cash and cash equivalents 4,888,313 4,888,313 Capital assets, non-depreciable 61,659,120 61,659,120 Capital assets, depreciable, net 16,413,083 89,693 16,502,776 Total assets 104,351,000 696,502 105,047,502

Deferred Outflow Of ResourcesPension deferrals 4,223,893 4,223,893 Total deferred outflows 4,223,893 - 4,223,893

LiabilitiesAccounts payable 2,102,777 10,183 2,112,960 Accrued interest payable 618,569 618,569 Intergovernmental payables - State 65,673 65,673 Unearned revenue 133,227 82,561 215,788 Accrued salaries and wages 821,955 821,955 Net pension liability 18,958,369 18,958,369 Current portion of long-term obligations 3,095,427 3,095,427 Noncurrent portion of long-term obligations 43,008,663 43,008,663 Total liabilities 68,804,660 92,744 68,897,404

Deferred Inflow Of ResourcesPension deferrals 7,226,296 7,226,296

Net PositionNet investment in capital assets 46,106,571 89,693 46,196,264 Restricted for:

Debt service fund 499,500 499,500 Capital projects fund 844,969 844,969 Capital reserve 2,500,000 2,500,000 Maintenance reserve 2,388,313 2,388,313

Unrestricted (deficit) (19,795,416) 514,065 (19,281,351) Total net position 32,543,937$ 603,758$ 33,147,695$

June 30, 2020


Statement of Net Position

20


A-2

Operating Capital Charges for Grants and Grants and Governmental Business-type

Functions/Programs Expenses Services Contributions Contributions Activities Activities Total

Governmental activitiesInstruction 41,543,568$ 283,048$ 1,338,194$ (39,922,326)$ (39,922,326)$ Support services:

Speech, OT, PT, and related services 1,745,707 (1,745,707) (1,745,707) Health services 693,283 (693,283) (693,283) Other support services 6,213,672 237,862 (5,975,810) (5,975,810) Improvement of instruction 2,034,495 (2,034,495) (2,034,495) Other support: instructional staff 155,888 (155,888) (155,888) School library 1,384,809 (1,384,809) (1,384,809) General administration 834,730 (834,730) (834,730) School administration 2,646,776 (2,646,776) (2,646,776) Central services 1,425,438 (1,425,438) (1,425,438) Administrative information technology 107,918 (107,918) (107,918) Plant operation and maintenance 8,107,811 278,124 (7,829,687) (7,829,687) Student transportation 3,026,137 (3,026,137) (3,026,137)

Interest on long-term debt 1,410,366 (1,410,366) (1,410,366) Total governmental activities 71,330,598 283,048 1,854,180 - (69,193,370) (69,193,370)

Business-type activitiesFood Service 966,160 949,613 (16,547)$ (16,547) Prime Time 216,712 110,942 (105,770) (105,770) Early Childhood 510 6,944 6,434 6,434

Total business-type activities 1,183,382 1,067,499 - - (115,883) (115,883) Total primary government 72,513,980$ 1,350,547$ 1,854,180$ -$ (69,193,370) (115,883) (69,309,253)

55,660,279 55,660,2792,922,993 2,922,993

12,869,261 12,869,261554,642 554,642151,638 30,629 182,267

72,158,813 30,629 72,189,442 2,965,443 (85,254) 2,880,189

29,578,494 689,012 30,267,50632,543,937$ 603,758$ 33,147,695$

Interest Income

Net Position—beginningNet Position—ending

MiscellaneousTotal general revenues

Change in net position

General revenues:

State and federal sources—unrestricted

Property taxes, levied for general purposesProperty taxes, levied for debt service

Taxes:

Net (Expense) Revenue and Changes in Net Position


Statement of Activities

Year ended June 30, 2020

Program Revenues

21

Fund Financial Statements

Governmental Funds

B-1

Special Capital Debt TotalGeneral Revenue Projects Service Governmental

Fund Fund Fund Fund Funds

AssetsCash and cash equivalents $ 2,625,801 $ 13,352,988 $ 638,007 $ 16,616,796 Accounts receivable:

State 752,205 $ 9,259 771,672 1,533,136 Federal 290,931 290,931 Other 2,279,403 94,955 606,883 2,981,241 Interfund 147,635 480,062 627,697

Restricted assets:Cash and cash equivalents 4,888,313 4,888,313

Total assets $ 10,693,357 $ 395,145 $ 14,731,543 $ 1,118,069 $ 26,938,114

Liabilities and Fund BalancesLiabilities:

Accounts payable $ 865,092 $ 99,125 $ 3,009 967,226$ Intergovernmental payables: State 65,673 65,673 Interfunds payable 31,620 147,635 480,062 659,317 Unearned revenue 82,712 50,515 133,227

Total liabilities 896,712 395,145 533,586 1,825,443

Fund balances:Restricted for:

Maintenance Reserve 2,388,313 2,388,313 Capital reserve account 2,500,000 2,500,000 Debt service $ 1,118,069 1,118,069 Capital projects 14,197,957 14,197,957

Assigned to:Other purposes 1,399,573 1,399,573 Designated for subsequent

year's expenditures 2,110,861 2,110,861 Unassigned (deficit): 1,397,898 1,397,898 Total fund balances 9,796,645 - 14,197,957 1,118,069 25,112,671 Total liabilities and fund balances $ 10,693,357 $ 395,145 $ 14,731,543 $ 1,118,069

78,072,203

(618,569)

Unamortized premium on bonds and lease (326,020)

Accrued salaries and wages (821,955)

(45,778,070)

Deferred pension costs in governmental activities are notfinancial resources and are therefore not reported in thefunds. (3,002,403)

Accrued pension contributions for the June 30, 2020 planyear end are not paid with current economic resources andare therfeore not reported as a liability in the funds, but areincluded in the accounts payable in the government-widestatement of net position. (1,135,551)

Net pension liability is not due and payable in the currentperiod and therefore is not reported as a liability in thefunds. (18,958,369)

32,543,937$

Holmdel Township School DistrictGovernmental Funds

Balance Sheet

June 30, 2020

financial resources and therefore are not reported in theCapital assets used in governmental activities are not

Major Funds

Amounts reported for governmental activities in thestatement of net position (A-1) are different because:

Net position of governmental activities


funds. The cost of the assets is $109,241,078 and

Accrued interest on long-term debt is not due and payablein the current period and therefore is not reported as a

the accumulated depreciation is $31,168,875.

liability in the funds.

Long-term liabilities, including bonds payable, capital leases and compensated absences are not due and payable in the current period and therefore are not reported as liabilities in the funds.

22

B-2

Special Capital Debt TotalGeneral Revenue Projects Service Governmental

Fund Fund Fund Fund Funds

RevenuesLocal sources:

Local tax levy $ 55,660,279 $ 2,922,993 $ 58,583,272 Tuition 283,048 283,048 Interest Income 75,115 $ 479,527 554,642 Miscellaneous 151,638 $ 168,804 320,442

Total local sources 56,170,080 168,804 479,527 2,922,993 59,741,404

State sources 12,356,963 746,860 723,575 13,827,398 Federal sources 24,093 971,505 995,598 Total revenues 68,551,136 1,887,169 479,527 3,646,568 74,564,400

ExpendituresCurrent:

Instruction 24,211,112 1,338,194 25,549,306 Undistributed-current:

Instruction 1,086,050 1,086,050 Speech, OT, PT, and related services 1,140,595 1,140,595 Health services 476,134 476,134 Other support services 3,703,564 270,851 3,974,415 Improvement of instruction 1,261,242 1,261,242 Education media library 855,111 855,111 Other support: instructional staff 110,148 110,148 General administration 649,959 649,959 School administration 1,620,296 1,620,296 Central services 885,962 885,962 Administrative information technology 66,118 66,118 Required maintenance of plant services 1,293,965 1,293,965 Operation of plant 4,538,474 4,538,474 Student transportation 2,831,811 2,831,811 Unallocated benefits 11,932,099 11,932,099 On-behalf TPAF social security

and pension contributions 9,048,883 9,048,883 Capital outlay 463,267 278,124 18,059,403 18,800,794 Debt Service:

Principal 2,415,000 2,415,000 Interest 1,510,435 1,510,435

Cost of lease issuance 25,581 25,581 Total expenditures 66,174,790 1,887,169 18,084,984 3,925,435 90,072,378

Excess (deficiency) of revenues over (under) expenditures 2,376,346 (17,605,457) (278,867) (15,507,978)

Other financing sources (uses)Capital lease (non-budgeted) 755,000 755,000 Premium on lease 86,057 86,057 Transfers in 1,000,000 479,527 1,479,527 Transfers out (1,000,000) (479,527) (1,479,527)

Total other financing sources (uses) (1,000,000) - 1,361,530 479,527 841,057

Net change in fund balances 1,376,346 (16,243,927) 200,660 (14,666,921) Fund balances, July 1 8,420,299 30,441,884 917,409 39,779,592 Fund balances, June 30 9,796,645$ -$ 14,197,957$ 1,118,069$ 25,112,671$

Major Funds

The reconciliation of the fund balances of governmental funds to the net position of governmental activities in the statement of net position is presented in an accompanying schedule (B-3).



Statement of Revenues, Expenditures and Changes in Fund Balances


23

B-3

Total net change in fund balances - governmental funds (from B-2) (14,666,921)$

Amounts reported for governmental activities in the statementof activities (A-2) are different because:

Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the period.

Depreciation expense (1,467,317)$ Capital outlays 18,152,155

16,684,838

The issuance of long-term debt for general and refunding purposes provides current financial resources to governmental funds, however has no effect on net assets.

Capital lease issued (755,000)

The repayment of the principal of long-term debt, including capital lease obligations, consumes the current financial resources of governmental funds. This transaction, however, has no effect on net position.

Serial bonds payable 2,415,000 Obligations under capital leases 425,000

2,840,000

Governmental funds report the effect of premiums and similar items when debt is first issued, whereasthese amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences.

Premium on lease issuance (86,057) Amortization of premium on bonds 98,669 Amortization of premium on leases 12,909

Amortization of deferred accounting loss (21,605) 3,916

In the statement of activities, interest on long-term debt/capital leases is accrued, regardless of when due. In the governmental funds, interest is reported when due. 35,677

In the statement of activities, certain operating expenses, e.g., compensated absences (vacations) aremeasured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are reported in the amount of financial resources used (paid). (86,254)

On the modified accrual basis of accounting, accrued salaries for future retroactive payments that are not paid with current financial resources are not reported. These expenditures are, however, reported in the statement of activities under the full accrual basis of accounting. (821,955)

Changes to net pension liability, deferred outflows and deferred inflows reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.

Pension expense and changes in pension deferrals (268,858)

Change in net position of governmental activities (A-2) 2,965,443$




Reconciliation of the Statement of Revenues, Expendituresand Changes in Fund Balances to the Statement of Activities

24

Proprietary Funds

B-4

Food ChildcareService Programs Total

Assets:Current Assets:

Cash and Cash Equivalents 323,958$ 244,189$ 568,147$ Accounts Receivables 7,042 7,042 Interfund Receivable 31,620 31,620

Total - Current Assets 331,000 275,809 606,809

Noncurrent Assets:Furniture, Machinery and Equipment 572,272 25,840 598,112 Less:

Accumulated Depreciation (482,579) (25,840) (508,419) Total - Noncurrent Assets 89,693 - 89,693 Total Assets 420,693 275,809 696,502

Liabilities and Net Position:Liabilities:

Current Liabilities:Accounts Payable 10,131 52 10,183 Unearned Revenue 82,561 82,561

Total Liabilities 92,692 52 92,744

Net Position:Investment in Capital Assets 89,693 89,693 Unrestricted 238,308 275,757 514,065

Total Net Position 328,001$ 275,757$ 603,758$



Holmdel Township School DistrictProprietary Funds

Statement of Net Position

Major FundsBusiness-Type Activities

25

B-5


Operating Revenues:Charges for Services:

Daily Sales - Non-Reimbursable Programs 949,613$ 949,613$ Tuition 117,886$ 117,886

Miscellaneous Revenue 30,629 30,629

Total Operating Revenues 980,242 117,886 1,098,128

Operating Expenses:Salaries 192,696 192,696 Purchased Professional/Technical Services 882,399 22,520 904,919 Other Purchased Service 12,999 12,999 Repairs and Maintenance 12,024 12,024 Supplies and Materials 44,853 1,413 46,266 Depreciation 13,885 13,885 Utilities Expense 593 593

Total Operating Expenses 966,160 217,222 1,183,382

Operarting Income (Loss) 14,082 (99,336) (85,254)

Total Net Position - Beginning 313,919 375,093 689,012

Total Net Position - Ending 328,001$ 275,757$ 603,758$


Major Funds



Statement of Revenues, Expenses, and Changes in Net Position

Business-Type Activities

26

B-6


Cash Flows From Operating Activities:Receipts From Customers 977,526$ 117,886$ 1,095,412$ Payments To Employees (192,696) (192,696) Payments To Suppliers (914,095) (24,943) (939,038)

Net Cash Provided By/(Used For)Operating Activities 63,431 (99,753) (36,322)

Cash Flows From Capital and Related Financing Activities:Purchases of Capital Assets (55,021) (55,021)

Net Cash (Used For) Capital andRelated Financing Activities (55,021) (55,021)

Cash Flows From Noncapital Financing Activities:Interfund transfers, net (1,237,288) (511,320) (1,748,608)

Net Cash (Used For) Noncapital Financing Activities (1,237,288) (511,320) (1,748,608)

Net (Decrease) in Cash andCash Equivalents (1,228,878) (611,073) (1,839,951)

Balance - Beginning of Year 1,552,836 855,262 2,408,098

Balance - End of Year 323,958$ 244,189$ 568,147$

Reconciliation of Operating Income To NetCash Provided By (Used For) Operating Activities:

Operating Income/(Loss) 14,082$ (85,254)$ Adjustments to Reconcile Operating Income/(Loss)

to Net Cash Provided By/(Used For) Operating Activities:Depreciation 13,885 13,885 (Increase) in Accounts Receivable (2,716) (2,716) Increase/(Decrease) in Accounts Payable 10,131 9,714 Increase in Unearned Revenue 28,049 28,049

Total Adjustments 49,349 48,932

Net Cash Provided By/(Used For)Operating Activities 63,431$ (36,322)$



Statement of Cash Flows


Major FundsBusiness-Type Activities

27

Fiduciary Funds

B-7

Private-PurposeScholarship Funds Compensation Trust Agency Funds

AssetsCash and cash equivalents $ 35,666 $ 38,617 $ 2,882,282 Accounts receivable 164,883 25,000 Total assets $ 35,666 $ 203,500 $ 2,907,282

LiabilitiesPayroll deductions payable 303,949 Accounts payable 76,059 2,381,405 Due to student groups 221,928 Total liabilities $ 76,059 $ 2,907,282

Net positionHeld in trust for unemployment claims 127,441$ Held in trust for scholarships $ 35,666


Unemployment

Holmdel Township School DistrictFiduciary Funds

Statement of Fiduciary Net Position


28

B-8

Private-Purpose UnemploymentScholarship Compensation

Funds Trust

AdditionsContributions:

Employee $ 74,497 Donations $ 300

Total additions 300 74,497

DeductionsUnemployment claims paid 172,404

Total deductions - 172,404 Change in net position 300 (97,907)

Net position-beginning of the year 35,366 225,348 Net position-end of the year 35,666$ 127,441$


Holmdel Township School DistrictFiduciary Funds

Statement of Changes in Fiduciary Net Position


29


Notes to the Basic Financial Statements


1. Summary of Significant Accounting Policies The financial statements of the Holmdel Township School District (the “District”) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the District’s accounting policies area described below. A. Reporting Entity The financial reporting entity consists of (a) the primary government, (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization’s governing body and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. The District, as the primary government for financial reporting entity purposes, has oversight responsibility and control over all activities related to the Holmdel Township School District in Holmdel Township, New Jersey. The District receives funding from local, state, and federal government sources and must comply with the requirements of these funding source entities. The District has no component units that are required to be included within the reporting entity, as set forth in Section 2100 of the GASB Codification of Governmental Accounting and Financial Reporting Standards B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of changes in net position) report information on all of the nonfiduciary activities of the District.

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1. Summary of Significant Accounting Policies (continued) Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include (1) charges to students or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. The New Jersey Department of Education (NJDOE) has elected to require New Jersey school districts to treat each governmental and proprietary fund as a major fund and each major individual fund is reported as separate columns in the fund financial statements. The NJDOE believes the presentation of all funds as major is important for public interest and to promote consistency among New Jersey School District financial reporting. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, except for reimbursement grants, the District considers revenues to be available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recoded when a liability is incurred, as under accrual accounting.

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1. Summary of Significant Accounting Policies (continued) However, debt services expenditures, as well as expenditures related to compensated absences, the net position liability and capital leases, are recorded only when payment is due. For this purpose, the District considers all revenues to be available if they are collected within 60 days of the end of the current fiscal period. Property taxes, interest, and state and federal equalization monies associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal year. All other revenue items are considered to be measurable and available only when the District receives cash. The District has reported the following major governmental funds:

General Fund: The general fund is the general operating fund of the District and is used to account for all financial resources except those required to be accounted for in another fund. Included are certain expenditures for vehicles and movable instructional or non-instructional equipment, which are classified in the capital outlay subfund. Special Revenue Fund: The District maintains one special revenue fund, which includes the proceeds of specific revenue sources (other than major capital projects) that are legally restricted or committed to expenditures for specified purposes. The revenue sources reported in the Special Revenue Fund include resources from the United States government, the State of New Jersey and some local organizations.

Capital Projects Fund: The capital projects fund is used to account for and report financial resources that are restricted, committed, or assigned to an expenditure to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds). Debt Service Fund: The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned to expenditures for payments made for principal and interest on long-term general obligation debt of governmental funds.

The District reports the following major proprietary funds:

Enterprise Funds (Food Service, and Childcare Programs): The enterprise funds account for all revenues and expenses pertaining to the cafeteria and the summer and after-school programs. The enterprise funds are utilized to account for operations that are financed and operated in a manner similar to private business enterprises.

The stated intent is that the costs (i.e. expenses including depreciation and indirect costs) of providing goods or services on a continuing basis are financed or recovered primarily through user charges.

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1. Summary of Significant Accounting Policies (continued) Additionally, the District reports the following fiduciary fund types:

Fiduciary Funds of the District include the unemployment compensation and private-purpose scholarship trust funds and agency funds. The District’s agency funds are purely custodial (assets equal liabilities) and thus do not involve measurements of results of operations. The following is a description of the fiduciary funds of the School District.

Trust Funds: The unemployment compensation fund is used to account for contributions from the District and employees and interest earned on the balance as well as payments to the State for reimbursement of unemployment claims. Although there is no formal trust agreement, the State of New Jersey requires school districts to include the unemployment compensation trust as a private-purpose trust fund in the fiduciary fund. The principal and income deposited into this fund are for the sole benefit of specific individuals, former employees, and cannot be used to support the government’s own programs. The management of the District is not involved in determining the amounts current employees contribute to the fund or amounts paid out by the fund. That determination is made by the State of New Jersey. Additionally, the unemployment compensation trust fund does not meet the criteria required to be included as an enterprise fund. One of the following criteria would need to be met for inclusion as an enterprise fund: the activity is financed with debt that is secured by a pledge of the revenues charged; laws or regulations require that the activity’s cost be recovered with fees and charges, rather than with taxes or similar revenues; the pricing policies of the activity establish fees and charges designed to recover its costs. These criteria are not met as follows and therefore the unemployment compensation fund is recorded as a trust fund: there is no debt issued related to unemployment compensation claims; laws and regulations do not require that the activity’s exceed employee contributions and those employee contributions costs be recovered with fees and charges, in fact, employer contributions greatly are raised through taxation; and lastly pricing policies are not established by the District as employee contributions to the activity are regulated by the State of New Jersey and contributions are raised through payroll taxes. The private-purpose scholarship fund is utilized to provide scholarships to students and to account for the related transactions.

Agency Funds (Payroll and Student Activity Funds): The agency funds are used to account for the assets that the District holds on behalf of others as their agent. These are custodial in nature and do not involve measurement of results of operations.

As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements, however, interfund services provided and used are not eliminated in the process of consolidation.

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1. Summary of Significant Accounting Policies (continued) Amounts reported as program revenues include (1) charges to customers or applicants for goods, services, or privileges provided, (2) operating grants and contributions, and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenue and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the District enterprise funds are charges for sales of food, and tuition for the summer and after-school programs. Operating expenses for proprietary funds include the cost of sales, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Ad Valorem (Property) Taxes are susceptible to accrual as, under New Jersey State Statute, a municipality is required to remit to its school district the entire balance of taxes in the amount voted upon or certified prior to the end of the school year. The District records the entire approved tax levy as revenue (accrued) at the start of the fiscal year, since the revenue is both measurable and available. The District is entitled to receive moneys under the established payment schedule and the unpaid amount is considered to be an “accounts receivable.” The County Board of Taxation is responsible for the assessment of properties and the Township Tax Collector is responsible for collection of taxes. Assessments are certified and taxes are levied on January 1; taxes are due February 1, May 1, August 1 and November 1. Unpaid taxes are considered delinquent the following January 1 and are then subject to lien. D. Budgets/Budgetary Control Annual appropriated budgets are prepared in the spring of each year for the general, special revenue and debt service funds. The budgets are submitted to the Monmouth County office of the DOE for approval. Budgets are prepared using the modified accrual basis of accounting and the special revenue fund uses a non-GAAP budget (budgetary basis). The legal level of budgetary control is established at line item accounts within each fund. Line item accounts are defined as the lowest (most specific) level of detail as established pursuant to the minimum chart of accounts referred in N.J.A.C. 6A:23. All budget amendments must be approved by School Board resolution. Budgetary transfers were made during the current year in accordance with statutory guidelines. The amendments made by the District were part of the normal course of operations.

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1. Summary of Significant Accounting Policies (continued) The over-expenditure in the General Fund is due to the inclusion of the non-budgeted on-behalf payments made by the State of New Jersey as District expenditures. These amounts are offset by related revenues and as such do not represent budgetary over-expenditures. Formal budgetary integration into the accounting system is employed as a management control device during the year. For governmental funds, there are no substantial differences between the budgetary basis of accounting and accounting principles generally accepted in the United States of America with the exception of the legally mandated revenue recognition of the last two state aid payments for budgetary purposes only and the special revenue fund as noted below. Encumbrance accounting is also employed as an extension of formal budgetary integration in the governmental fund types. Unencumbered appropriations lapse at fiscal year-end.

The accounting records of the special revenue fund are maintained on the grant accounting budgetary basis. The grant accounting budgetary basis differs from GAAP in that the grant accounting budgetary basis recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not. Sufficient supplemental records are maintained to allow for the presentation of GAAP basis financial report. E. Interfund Receivables/Payables Interfund receivables/payables represent amounts that are owed, other than charges for goods or services rendered to/from a particular fund in the District and that are due within one year. F. Inventories Food service fund inventories are the property of the food service management company. They are recorded at market value at the time of donation, which approximates current market value, using the first-in, first-out (FIFO) method. G. Tuition Tuition charges were established by the Board of Education based on estimated costs. The charges are subject to adjustment when the final costs have been determined. Tuition charges for the current fiscal year were based on rates established by the receiving district. These rates are subject to change when the actual costs have been determined.

35




1. Summary of Significant Accounting Policies (continued) H. Capital Assets Capital assets, which include land, construction in progress, property, plant and equipment, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of more than $2,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost through estimation procedures performed by an independent appraisal company. Land was valued at assessed value based upon information received from the Township of Holmdel. Donated capital assets are valued at acquisition value on the date of acquisition. The costs of normal repairs and maintenance that do not add to the value of the asset or materially extend the assets lives are not capitalized. Property, plant and equipment of the District is depreciated using the straight line amethod. The following estimated useful lives are used to compute depreciation:

Years Land Improvements 10-20 Building and improvements 10-50 Furniture and equipment 5-20 Vehicles 5-10

I. Compensated Absences A liability for compensated absences that are attributable to services already rendered and that are not contingent on a specific event that is outside the control of the employer and employee is accrued as employees earn the rights to the benefits. The District uses the “vesting method” for estimating its accrued sick and vacation leave liability. District employees are granted vacation and sick leave in varying amounts under the District’s personnel policies and collective bargaining agreements. In the event of termination, an employee is reimbursed for accumulated vacation time. Sick leave benefits provide for ordinary sick pay and begin vesting with the employee after one year of service. Sick leave benefits are eligible for payment to employees upon retirement under the required terms of the NJ Division of Pension & Benefits as follows: the employee has reached age 55 and 25 years of service, or the employee has reached age 60 with no length of service requirement. The liability for vested compensated absences of the district is recorded in the government-wide financial statements and includes salary related payments.

36




1. Summary of Significant Accounting Policies (continued) The liability for vested compensated absences of the proprietary fund types is recorded within those funds as the benefits accrue to employees. As of June 30, 2020, a liability existed for compensated absences in the government-wide financial statements in the amount of $785,470 and no liability existed for compensated absences in the enterprise funds. J. Accrued Salaries and Wages The District has accrued, in the government-wide financial statements, for retroactive payments due to be paid to employees that had unsettled prior year expired contracts as of June 30, 2020. As of June 30, 2020 the District has accrued $821,955 for collective bargaining agreements that have not been settled through current year-end. K. Unearned Revenue Unearned revenue in the general and special revenue fund represents cash which has been received but not yet earned, and outstanding encumbrances in the special revenue fund. Unearned revenue in the other enterprise funds represents cash received in advance of the related services being provided. L. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District has two items that qualify for reporting in this category, including deferred amounts from the refunding of debt and deferred amounts related to pensions. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time. The District has one item that qualifies for reporting in this category, deferred amounts related to pensions. M. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond and lease premiums and discounts, are deferred and amortized over the life of the bonds using the straight-line method which approximates the effective interest method.

37




1. Summary of Significant Accounting Policies (continued) Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, governmental fund types recognize bond and lease premiums and discounts, as well as bond and lease issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. N. Fund Balances GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions (“GASB 54”) established fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. Under GASB 54, fund balances in the governmental funds financial statements are reported under the modified accrual basis of accounting and classified into the following five categories:

1) Nonspendable – includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Assets included in this fund balance category include prepaid assets, inventories, long-term receivables, and corpus of any permanent funds.

2) Restricted - includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.

3) Committed - includes amounts that can be used only for the specific purposes imposed by a formal action of the government’s highest level of decision-making authority. The District’s highest level of decision-making authority is the Board of Education (the “Board”) and formal action is taken by resolution of the Board at publicly held meetings. Once committed, amounts cannot be used for other purposes unless the Board revises or changes the specified use by taking the same action (resolution) taken to originally commit these funds.

4) Assigned – amounts intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. Intent is expressed by either the Board or Business Administrator, to whom the Board has delegated the authority to assign amounts to be used for specific purposes, including the encumbering of funds.

5) Unassigned - includes all spendable amounts not contained in the other classifications in the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed or assigned to specific purposes within the general fund. The general fund is the only fund that reports a positive unassigned fund balance amount. In the other governmental funds, if expenditures incurred for specific

38




1. Summary of Significant Accounting Policies (continued)

purposes exceed the amounts restricted, committed or assigned to those purposes, it may be necessary to report a negative unassigned fund balance

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first, then unrestricted resources as they are needed. For the unrestricted fund balance, the District first spends committed funds, then assigned funds, and finally, unassigned funds. Of the $9,796,645 of fund balance in the General Fund, $2,500,000 has been restricted in the capital reserve account, $2,388,313 has been restricted in the maintenance reserve account, $2,110,861 is designated for future years expenditures, $1,399,573 of encumbrances are assigned to other purposes and $1,397,898 is unassigned. O. Net Position and Fund Balance/Restricted Assets GASB Statement Number 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position became effective for financial statements for periods beginning after December 15, 2011 and established standards for reporting deferred outflows of resources, deferred inflows of resources and net position. The adoption of this statement resulted in a change in the presentation of the statement of net position to what is now referred to as the statement of net position and the term “net assets” is changed to “net position” throughout the financial statements. Net Position represents the difference between assets, deferred outflows, deferred inflows, and liabilities in the government-wide financial statements. Net position invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets. Net position is reported as restricted in the government-wide financial statements when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. P. Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. Actual results could differ from those estimates, particularly given the significant social and economic disruptions and uncertainties associated with the ongoing COVID-19 (“Coronavirus”) pandemic and the mitigation responses, and such differences may be material. (See Note 10)

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1. Summary of Significant Accounting Policies (continued) Q. On-Behalf Payments Revenues and expenditures of the general fund include payments made by the State of New Jersey for social security contributions and pension contributions for certified teachers and other members of the New Jersey Teachers Pension and Annuity Fund. The amounts are not required to be included in the District’s annual budget. R. Calculation of Excess Surplus The designation for restricted fund balance-excess surplus is a required calculation pursuant to N.J.S.A. 18A:7F-7, as amended. New Jersey school districts are required to reserve fund balance in the general fund at the fiscal year end of June 30 if they did not appropriate a required minimum amount as budgeted fund balance in their subsequent years’ budget. The District’s excess fund balance at June 30, 2020 was $0. S. Cash, Cash Equivalents and Investments Cash and cash equivalents include petty cash, amounts on deposit and short-term investments with original maturities of three months or less. Investments are stated at fair value in accordance with Governmental Accounting Standards Board (GASB) Statement No. 31, “Accounting and Financial Reporting for Certain Investments and for External Investment Pools.” The District classifies certificates of deposit, which have original maturity dates of more than three months but less than twelve months from the date of purchase, as investments and are stated at cost. All other investments are stated at fair value. T. Tax Abatements As defined by the Governmental Accounting Standards Board (GASB), a tax abatement is an agreement between a government and an individual or entity in which the government promises to forgo tax revenues and the individual or entity promises to subsequently take a specific action that contributes to economic development or otherwise school district is situated are authorized to enter into tax abatement agreements. Furthermore if the county or municipality entered into tax abatement agreements, those agreements will not directly affect the school district’s local tax revenue because N.J.S.A.54:4-75 and N.J.S.A. 54:4-76 require that amounts so forgiven must effectively be recouped from other taxpayers and remitted to the school district.

40




1. Summary of Significant Accounting Policies (continued)

For a local school district board of education or board of school estimate that has elected to raise their minimum tax levy using the required local share provisions at N.J.S.A. 18A:7F-5(b), the loss of revenue resulting from the municipality or county having entered into a tax abatement agreement is indeterminate due to the complex nature of the calculation of required local share performed by the New Jersey Department of Education based upon district property value and wealth. There have been no tax abatement agreements entered into by the Township that will affect the District.

U. Subsequent Events

Management has reviewed and evaluated all events and transactions from June 30, 2020 through February 2, 2021, the date that the financial statements were issued, for possible disclosure and recognition in the accompanying financial statements, and no items have come to the attention of the District which would require disclosure or recognition.

2. Reconciliation of Government-wide and Fund Financial Statements

Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net position

The governmental fund balance sheet includes reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide statement of net position.

One element of that reconciliation explains that long-term liabilities, including bonds payable, capital leases payable, unamortized premium on bonds, and compensated absences are not due and payable in the current period and therefore are not reported in the funds.

The details of this $46,104,090 difference are as follows:

Bonds payable 42,418,000$ Capital leases payable 2,574,600 Unamortized premium on bonds 252,872 Unamortized premium on leases 73,148 Compensated absences 785,470

Net adjustment to reduce fund balance-total governmental funds to arrive at net position – governmental activities 46,104,090$

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3. Deposits and Investments New Jersey school districts are limited as to the types of investments and types of financial institutions they may invest in. New Jersey statute 18A:20-37 provides a list of permissible investments that may be purchased by New Jersey school districts. Additionally, the District has adopted a cash management plan that requires it to deposit public funds in public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act (“GUDPA”). GUDPA was enacted in 1970 to protect Government Units from a loss of funds on deposit with a failed banking institution in New Jersey. N.J.S.A. 17:9-41 et. seq. establishes the requirements for the security of deposits of governmental units. The statute requires that no governmental unit shall deposit public funds in a public depository unless such funds are secured in accordance with the Act. Public depositories include savings and loan institutions, banks (both state and national banks) and savings banks, the deposits of which are federally insured. All public depositories must pledge collateral, having a market value at last equal to five percent of the average daily balance of collected public funds, to secure the deposits of governmental units. If a public depository fails, the collateral it has pledged, plus the collateral of all other public depositories, is available to pay the full amount of their deposits to the governmental units. Deposits New Jersey statutes require that school districts deposit public funds in public depositories located in New Jersey that are insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or by any other agency of the United States that insures deposits made in public depositories. School districts are also permitted to deposit public funds in the State of New Jersey Cash Management Fund (NJCMF) and New Jersey Asset and Rebate Management Fund (NJARM). New Jersey statutes require public depositories to maintain collateral for deposits of public funds that exceed depository insurance limits as follows:

The market value of the collateral must equal at least 5% of the average daily balance of collected public funds on deposit.

In addition to the above collateral requirement, if the public funds deposited exceed 75% of the capital funds of the depository, the depository must provide collateral having a market value at least equal to 100% of the amount exceeding 75%.

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3. Deposits and Investments (continued) All collateral must be deposited with the Federal Reserve Bank of New York, the Federal Reserve Bank of Philadelphia, the Federal Home Loan Bank of New York, or a banking institution that is a member of the Federal Reserve System and has capital funds of not less than $25,000,000. The District’s cash and cash equivalents are classified below to inform financial statement users about the extent to which the District’s deposits and investments are exposed to custodial credit risk. Operating cash accounts are held in the District’s name by several commercial banking institutions. At June 30, 2020, the District’s carrying amount of deposits was $8,925,764 and the bank balance was $9,932,986. Of the bank balance, $296,000 was secured by federal depository insurance and $6,579,738 was covered by the New Jersey Governmental Unit Deposit Protection Act (GUDPA). $3,057,248 held in the District’s agency accounts are not covered by GUDPA. Pursuant to GASB Statement No. 40, “Deposit and Investment Risk Disclosures” (“GASB 40”), the District’s operating cash accounts are profiled in order to determine exposure, if any, to Custodial Credit Risk (risk that in the event of failure of the counterparty the District would not be able to recover the value of its deposits and investments). Deposits are considered to be exposed to Custodial Credit Risk if they are: uncollateralized (securities not pledged to the depositor), collateralized with securities held by the pledging financial institution, or collateralized with securities held by the financial institution’s trust department or agent but not in the government’s name. The District does not have a policy for the management of custodial credit risk, other than depositing all of its funds in banks covered by GUDPA. At least five percent of the District’s deposits were fully collateralized by funds held by the financial institution, but not in the name of the District. Due to the nature of GUDPA, further information is not available regarding the full amount that is collateralized. Investments New Jersey statutes permit the Board to purchase the following types of investments:

a. Bonds and other obligations of the United States or obligations guaranteed by the United States.

b. Bonds of any Federal Intermediate Credit Bank, Federal Home Loan Bank, Federal National Mortgage Agency or of any United States Bank which have a maturity date not greater than twelve months from the date of purchase.

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3. Deposits and Investments (continued)

c. State of New Jersey Cash Management Fund (NJCMF) and New Jersey Asset and Rebate Management Fund (NJARM).

d. Bonds or other obligations of the School District. New Jersey Cash Management Fund In order to maximize liquidity, the District utilizes the New Jersey Cash Management Fund (“NJCMF”). The NJCMF is administered by the State of New Jersey, Department of the Treasury and issues a separate report that can be obtained directly from the Department of the Treasury. It invests pooled monies from various State and non-State agencies in primarily short-term investments. The pooled shares are equal to the value of the District’s shares. The investments include: U.S. Treasuries, short-term commercial paper, U.S. Agency Bonds, Corporate Bonds, and Certificates of Deposit. Agencies that participate in the NJCMF typically earn returns that mirror short-term investment rates. Monies can be freely added or withdrawn from the NJCMF on a daily basis without penalty. At June 30, 2020 the District’s balance was $862,189. All investments in the NJCMF are governed by the regulations of the Investment Council, which prescribes specific standards designed to ensure the quality of investments and to minimize the risks related to investments. In all the years of the Division of Investment’s existence, the Division has never suffered a default of principal or interest on any short-term security held by it due to the bankruptcy of a securities issuer; nevertheless, the possibility always exists, and for this reason a reserve is accumulating to as additional protection for the “Other-Than State” participants. In addition to the Council regulations, the Division sets further standards for specific investments and monitors the credit of all eligible securities issuers on a regular basis. Custodial Credit Risk: The District does not have a policy for custodial credit risk. Credit Risk: The District does not have an investment policy regarding the management of credit risk. GASB 40 requires that disclosure be made as to the credit rating of all debt security investments except for obligations of the U.S. government or investments guaranteed by the U.S. government. Concentration of Credit Risk: The District places no limit on the amount the District may invest in any one issuer.

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3. Deposits and Investments (continued) Interest Rate Risk: The District does not have a policy to limit interest rate risk. New Jersey Asset & Rebate Management Program The New Jersey Asset & Rebate Management Program (the “NJ/ARM Program” “NJ/ARM”) was created in 1989 as a joint investment trust under the Interlocal Services Act. NJ/ARM provides local governments in New Jersey with investment management services for capital, reserve, and general operating funds. In addition, the Program offers investment management and arbitrage rebate compliance services for tax-exempt bond and note proceeds. NJ/ARM offers its Investors the benefit of a professionally managed investment program with multiple investment options. The NJ/ARM Joint Account provides a convenient vehicle for local governments to pool funds for short-term investment to meet daily liquidity needs. For longer-term investment strategies, the Individual Portfolio provides for customized investment portfolios of permitted securities pursuant to New Jersey statutes. The primary goal of the NJ/ARM Program is safety and security of the local government funds entrusted to it. The Joint Account portfolio is rated AAA by the Standard & Poor’s (an independent rating company) which is the highest rating available. The Program is designed to comply with all New Jersey statutes and regulations for the permitted investment of public funds. At June 30, 2020, the District’s balance in the NJARM was $15,241,868.

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4. Capital Assets The following schedule is a summarization of the governmental activities changes in capital assets for the year ended June 30, 2020:

Beginning Ending

Balance Increases BalanceGovernmental activities:Capital assets, not being depreciated:

Land $ 5,122,300 $ 5,122,300 Construction in progress 39,223,568 $ 17,313,252 56,536,820

Total capital assets, not being depreciated 44,345,868 17,313,252 61,659,120 Capital assets, being depreciated:

Buildings and building improvements 39,221,898 39,221,898 Machinery, equipment and vehicles 7,521,157 838,903 8,360,060

Total capital assets being depreciated 46,743,055 838,903 47,581,958 Less accumulated depreciation for:

Buildings and building improvements 23,994,998 715,790 24,710,788 Machinery, equipment and vehicles 5,706,560 751,527 6,458,087

Total accumulated depreciation 29,701,558 1,467,317 31,168,875 Total capital assets, being depreciated, net 17,041,497 (628,414) 16,413,083 Governmental activities capital assets, net $ 61,387,365 $ 16,684,838 $ 78,072,203

Depreciation expense was charged to functions/programs of the District for the year ended June 30, 2020 as follows:

Instruction 842,307$ Speech, OT, PT, and related services 36,240 Health services 15,128 Other support services 125,230 Improvement of instruction 40,073 Education media library 27,169 Other support: instruction staff 3,500 General administration 20,651 School administration 51,481 Central services 28,149 Administration information technology 2,101 Required maintenance of plant services 41,113 Operation of plant 144,200 Student transportation 89,975 Total depreciation expense - governmental activities 1,467,317$

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4. Capital Assets (continued) The following schedule is a summarization of business-type activities changes in capital assets for the year ended June 30, 2020:

Beginning EndingBalance Increases Balance

Business-type activitiesCapital assets, being depreciated:Equipment 543,091$ 55,021$ 598,112$ Less accumulated depreciation for:Equipment 494,532 13,887 508,419

Total business-type activities capital assets, net 48,559$ 68,908$ 89,693$

5. Long-Term Liabilities During the year ended June 30, 2020, the following changes occurred in governmental activities long-term liabilities:

Beginning Ending Due withinBalance Additions Reductions Balance One Year

Governmental activities:Compensated absences payable 699,216$ 263,584$ 177,330$ 785,470$ 78,547$ Bonds payable 44,833,000 2,415,000 42,418,000 2,400,000 Unamortized premium on bonds 351,541 98,669 252,872 98,669 Unamortized premium on leases 86,057 12,909 73,148 17,211 Capital lease payable 2,244,600 755,000 425,000 2,574,600 501,000

Subtotal 48,128,357 1,104,641 3,128,908 46,104,090 3,095,427 Net pension liability 20,743,837 1,785,468 18,958,369 Governmental activity long-

term liabilities 68,872,194$ 1,104,641$ 4,914,376$ 65,062,459$ 3,095,427$

The District expects to liquidate the compensated absences, capital lease payments, and net pension liabilities with payments made from the District’s general fund and the bonds payable from the debt service fund. Bonds Payable Bonds are authorized in accordance with State law by the voters of the municipality through referendums. All bonds are retired in serial installments within the statutory period of usefulness. Bonds issued by the District are general obligation bonds.

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5. Long-Term Liabilities (continued) Principal and interest due on all serial bonds outstanding is as follows:

Principal Interest Total

Year ending June 30:2021 2,400,000$ 1,423,585$ 3,823,585$ 2022 2,455,000 1,337,335 3,792,335 2023 2,510,000 1,249,373 3,759,373 2024 1,938,000 1,158,723 3,096,723 2025 1,975,000 1,063,644 3,038,644 2026-2030 10,800,000 4,301,213 15,101,213 2031-2035 12,540,000 1,798,713 14,338,713 Thereafter 7,800,000 407,875 8,207,875

42,418,000$ 12,740,459$ 55,158,459$

In October 2015, the District issued $7,740,000 of Refunding School Bonds to provide resources to refund a portion of the District’s outstanding debt. The bonds are due to mature annually through the 2023 fiscal year in installments ranging from $1,080,000 to $1,210,00 at an annual interest rate of 4.00%. In April 2018, the District issued $40,318,000 of School Bonds to complete an Educational, Athletic & Infrastructure Enhancement capital project. The bonds are due to mature annually through the 2038 fiscal year in installments ranging from $1,300,000 to $2,600,000 at annual interest rates ranging from 3.25% to 3.50%. Capital Leases Payable The School District has entered into capital lease agreements for equipment purchases and to fund Capital Projects. All capital leases are for terms of five to fifteen years. The following is a schedule of the remaining future minimum lease payments as of June 30, 2020:

AmountYear:

2021 $ 616,388 2022 446,288 2023 447,158 2024 279,761 2025 282,133 2026-2030 590,046 2031-2033 388,907 Total minimum lease payments 3,050,681 Less amounts representing interest (476,081)

Present value of net minimum lease

payments $ 2,574,600

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5. Long-Term Liabilities (continued) Capital leases were acquired to purchase the following assets: 6. Pension Plans

Description of Systems

Substantially all of the District’s employees participate in one of the following contributory defined benefit public employee retirement systems which have been established by State statute: the Teachers’ Pension and Annuity Fund (TPAF) or the Public Employees’ Retirement System (PERS). These systems are sponsored and administered by the State of New Jersey. The Teachers’ Pension and Annuity Fund Retirement System is considered a cost-sharing multiple-employer plan, with a special funding situation, as under current statute,

all employer contributions are made by the State of New Jersey on behalf of the Board and the system’s other related non-contributing employers. The Public Employees’ Retirement System is considered a cost-sharing multiple-employer plan.

Teachers’ Pension and Annuity Fund

The Teachers’ Pension and Annuity Fund was established in January 1955 under the provisions of N.J.S.A. 18A:66 to provide coverage including post-retirement health care to substantially all full time public school employees in the State. Membership is mandatory for such employees and vesting occurs after 10 years of service for pension benefits and 25 years for health care coverage. Age eligibility and benefit provisions were affected by Chapters 92 and 103, P.L. 2007, Chapter 89, P.L. 2008, Chapter 1, P.L. 2010, and Chapter 78, P.L. 2011. Members are classified into one of five tiers dependent upon the date of their enrollment. Tier 1, 2 and 3 members are eligible to retire at age 60, 60, and 62, respectively, with an annual benefit generally determined to be 1/55th of the average annual compensation for the highest three fiscal years’ compensation for each year of membership during years of credited service. Tier 4 and 5 members are eligible to retire at age 62 and 65, respectively, with an annual benefit generally determined to be 1/60th of the average annual compensation for the highest five fiscal years’ compensation for each year of membership during years of credited service.

Govermental Activities

Asset:Buildings and Building Improvements 1,475,000$ Machinery, equipment

and vehicles 2,963,151 Less: Accumulated depreciation (1,237,958)

Total 3,200,193$

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6. Pension Plans (continued) Anyone who retires early and is under their respective tier’s retirement age receives retirement benefits as calculated in the above mentioned formulas but at a reduced rate in accordance with applicable New Jersey Statute based upon their tier. Public Employee’s Retirement System The Public Employees’ Retirement System was established in January 1955 under the provisions of N.J.S.A. 43:15A to provide coverage including post-retirement health care to substantially all full time employees of the State or any county, municipality, school Board or public agency provided the employee is not a member of another State-administered retirement system. Age eligibility and benefit provisions were affected by Chapters 92 and 103, P.L. 2007, Chapter 89, P.L. 2008, Chapter 1, P.L. 2010, and Chapter 78, P.L. 2011. Members are classified into one of five tiers dependent upon the date of their enrollment. Tier 1, 2 and 3 members are eligible to retire at age 60, 60, and 62, respectively with an annual benefit generally determined to be 1/55th of the average annual compensation for the highest three fiscal years’ compensation for each year of membership during years of credited service. Tier 4 and 5 members are eligible to retire at age 62 and 65, respectively with an annual benefit generally determined to be 1/60th of the average annual compensation for the highest five fiscal years’ compensation for each year of membership during years of credited service. Anyone who retires early and is under their respective tier’s retirement age receives retirement benefits as calculated in the above mentioned formulas but at a reduced rate in accordance with applicable New Jersey statute based upon their tier. The State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, issued publicly available financial reports that include the financial statements and required supplementary information for TPAF and PERS. The financial reports may be obtained by writing to the State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, P.O. Box 295, Trenton, New Jersey 08625-0295. Funding Policy The contribution policy is set by New Jersey State Statutes and contributions are required by active members and contributing members. Plan member and employer contributions may be amended by State of New Jersey legislation. Under the provisions of Chapter 78, P.L. 2011, employee contribution rates for TPAF and PERS have increased to the final phase in rate of 7.5% of employees’ annual compensation, effective July 1, 2018.

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6. Pension Plans (continued) Employers are required to contribute at an actuarially determined rate in both the TPAF and PERS. The actuarially determined contribution includes funding for cost-of-living adjustments, noncontributory death benefits, and post-retirement medical premiums. Under current statute the Board is a non-contributing employer of the TPAF. During the year ended June 30, 2020, the State of New Jersey contributed $7,188,644 to the TPAF for normal costs of pension, post-retirement medical and long-term disability insurance benefits on behalf of the District. Also, in accordance with N.J.S.A. 18A:66-66 the State of New Jersey reimbursed the District $1,860,239 during the year ended June 30, 2020 for the employer’s share of social security contributions for TPAF members as calculated on their base salaries. These amounts have been included as both revenues and expenditures in the government-wide and fund financial statements. The District’s actuarially determined contributions to PERS for each of the years ended June 30, 2020, 2019, and 2018 were $1,135,551, $1,028,788, and $1,054,168, respectively, equal to the required contributions for each year. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of PERS and additions to/deductions from PERS fiduciary net position have been determined on the same basis as they are reported by PERS. For the purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Public Employee’s Retirement System (PERS) At June 30, 2020, the District reported a liability of $18,958,369 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation July 1, 2018 which was rolled forward to June 30, 2019. The District’s proportion of the net pension liability was based on a projection of the District’s long-term share of contributions to the pension plan relative to the projected contributions of all participating school districts, actuarially determined. At June 30, 2019, the District’s proportion was 0.1052162312 percent, which was a decrease of 0.0001385788 from its proportion measured as of June 30, 2018.

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6. Pension Plans (continued) For the year ended June 30, 2020, the District recognized full accrual pension expense of $1,346,380 in the government-wide financial statements. At June 30, 2020, the District reported deferred outflows of resources and deferred inflows of resources related to PERS from the following sources.

Deferred DeferredOutflows Inflows

of Resources of ResourcesDifferences between expected and actual experience 340,278$ 83,750$ Changes of assumptions 1,893,063 6,580,390 Net difference between projected and actual earnings on pension plan investments 299,265 Changes in proportion 855,001 262,891 District contributions subsequent to the measurement date 1,135,551

4,223,893$ 7,226,296$

$1,135,551 is reported as deferred outflows of resources related to pensions resulting from school district contributions subsequent to the measurement date. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended June 30:2021 (277,856)$ 2022 (1,535,811) 2023 (1,484,683) 2024 (769,434) 2025 (70,170)

(4,137,954)$

Actuarial Assumptions The collective total pension liability for the June 30, 2019 measurement date was determined by an actuarial valuation as of July 1, 2018, which was rolled forward to June 30, 2019. This actuarial valuation used the following actuarial assumptions, applied to all periods included in the measurement:

June 30, 2019Inflation rate

Price 2.75%Wage 3.25%

Salary increasesThrough 2026 2.00 - 6.00%

based on years of service

Thereafter 3.00 - 7.00%based on years of service

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6. Pension Plans (continued) The actuarial assumptions used in the July 1, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2014 to June 30, 2018. It is unlikely that future experience will not exactly conform to these assumptions. To the extent that actual experience deviates from these assumptions, the emerging liabilities may be higher or lower than anticipated. The more the experience deviates, the larger the impact on future financial statements.

Mortality Rates Pre-retirement mortality rates were based on the Pub-2010 General Below-Median Income Employee mortality table with an 82.2% adjustment for males and 101.4% adjustment for females, and with future improvement from the base year of 2010 on a generational basis. Post-retirement mortality rates were based on the Pub-2010 General Below-Median Income Healthy Retiree mortality table with a 91.4% adjustment for males and 99.7% adjustment for females, and with future improvement from the base year of 2010 on a generational basis. Disability retirement rates used to value disabled retirees were based on the Pub-2010 Non-Safety Disabled Retiree mortality table with a 127.7% adjustment for males and 117.2% adjustment for females, and with future improvement from the base year of 2010 on a generational basis. Mortality improvement is based on Scale MP-2019. Long-Term Rate of Return In accordance with State statute, the long-term expected rate of return on plan investments (7.00% at June 30, 2019) is determined by the State Treasurer, after consultation with the Directors of the Division of Investment and Division of Pensions and Benefits, the board of trustees and the actuaries. The long-term expected rate of return was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

53




6. Pension Plans (continued) Best estimates of arithmetic real rates of return for each major asset class included in PERS’s target asset allocation as of June 30, 2019 are summarized in the following table: Discount rate The discount rate used to measure the total pension liability was 6.28% as of June 30, 2019. This single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.00% and a municipal bond rate of 3.50% as of June 30, 2019 based on the Bond Buyer Go 20-Bond Municipal Bond Index, which includes tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be based on 70% of the actuarially determined contributions for the State employer and 100% of actuarially determined contributions for the local employers. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2057. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2057 and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

Target Long-Term ExpectedAsset Class Allocation Real Rate of Return

Risk mitigation strategies 3.00% 4.67%Cash equivalents 5.00% 2.00%U.S. treasuries 5.00% 2.68%Investment grade credit 10.00% 4.25%High yield 2.00% 5.37%Private Credit 6.00% 7.92%Real Assets 2.50% 9.31%Real Estate 7.50% 8.33%US Equity 28.00% 8.26%Non-US developed markets equity 12.50% 9.00%Emerging markets equity 6.50% 11.37%Private equity 12.00% 10.85%

100.00%

June 30, 2019

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6. Pension Plans (continued) Sensitivity of the District’s proportionate share of the net pension liability to changes in the discount rate The following presents the District’s proportionate share of the net pension liability as of June 30, 2019 calculated using the discount rate as disclosed above as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate:

Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued financial report for the State of New Jersey Public Employees Retirement System. Additional Information Collective balances of the Local Group at June 30, 2019 are as follows: Collective pension expense for the Local Group for the measurement period ended June 30, 2019 is $974,471,686. The average of the expected remaining service lives of all employees that are provided with pension through the pension plan (active and inactive employees) determined at June 30, 2019, 2018, 2017, 2016, 2015 and 2014 is 5.21, 5.63, 5.48, 5.57,5.72 and 6.44 years, respectively.

At 1% At Current At 1%Decrease Discount Rate Increase(5.28%) (6.28%) (7.28%)

District's proportionate share of the net pension liability 23,947,501$ 18,958,369$ 14,754,319$

6/30/2019

Collective deferred outflows of resources 3,149,522,616$ Collective deferred inflows of resources 7,645,087,574 Collective net pension liability 18,143,832,135

District's Proportion 0.1052162312%

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6. Pension Plans (continued) Teachers Pensions and Annuity Fund (TPAF) – Special Funding Situation The employer contributions for local participating employers are legally required to be funded by the State in accordance with N.J.S.A. 18:66-33. Therefore, these local participating employers are considered to be in a special funding situation as defined by GASB Statement No. 68 and the State is treated as a nonemployer contributing entity. Since the local participating employers do not contribute directly to the plan (except for employer specific financed amounts), there is no net pension liability or deferred outflows or inflows to report in the financial statements of the local participating employers. However, the notes to the financial statements of the local participating employers must disclose the portion of the nonemployer contributing entities’ total proportionate share of the net pension liability that is associated with the local participating employer. The State’s proportionate share of the TPAF net pension liability associated with the District as of June 30, 2019 was $145,193,512. The District’s proportionate share was $0. The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 01, 2018, which was rolled forward to June 30, 2019. The State’s proportionate share of the net pension liability associated with the District was based on a projection of the State’s long-term contributions to the pension plan associated with the District relative to the projected contributions by the State associated with all participating school districts, actuarially determined. At June 30, 2019, the State’s proportionate share of the TPAF net pension liability associated with the District was 0.2365834761 percent, which was a decrease of 0.0024946618% from its proportion measured as of June 30, 2018. For the year ended June 30, 2020, the District recognized on-behalf pension expense and revenue in the government wide financial statements of $6,704,815 for contributions incurred by the State.

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6. Pension Plans (continued) Actuarial assumptions The actuarial valuation used the following actuarial assumptions, applied to all periods included in the measurement: Mortality Rates Pre-retirement mortality rates were based on the Pub-2010 Teachers Above-Median Income Employee mortality table with a 93.9% adjustment for males and 85.3% adjustment for females, and with future improvement from the base year of 2010 on a generational basis. Post-retirement mortality rates were based on the Pub-2010 Teachers Above-Median Income Healthy Retiree mortality table with a 114.7% adjustment for males and 99.6% adjustment for females, and with future improvement from the base year of 2010 on a generational basis. Disability mortality rates were based on the Pub-2010 Non-Safety Disabled Retiree mortality table with a 106.3% adjustment for males and 100.3% adjustment for females, and with future improvement from the base year of 2010 on a generational basis. Mortality improvement is based on Scale MP-2019. The actuarial assumptions used in the July 1, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2015 to June 30, 2018. Long-Term Expected Rate of Return In accordance with State statute, the long-term expected rate of return on plan investments (7.00% at June 30, 2019) is determined by the State Treasurer, after consultation with the Directors of the Division of Investment and Division of Pensions and Benefits, the board of trustees and the actuaries. The long-term expected rate of return was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

June 30, 2019

Inflation rate 2.75%

Salary increases

2011-2026 1.55 - 4.45%based on years of service

Thereafter 2.75% - 5.65%based on years of service

Investment rate of return 7.00%

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6. Pension Plans (continued) These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in TPAF’s target asset allocation as of June 30, 2019 are summarized in the following table: Discount Rate The discount rate used to measure the total pension liability was 5.60% as of June 30, 2019. This single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.00% and a municipal bond rate of 3.50% as of June 30, 2019 based on the Bond Buyer Go 20-Bond Municipal Bond Index, which includes tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be based on 70% of the actuarially determined contributions for the State. Based on those assumptions, the plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through 2054. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through 2054 and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

Target Long-Term ExpectedAsset Class Allocation Real Rate of Return

Risk mitigation strategies 3.00% 4.67%Cash equivalents 5.00% 2.00%U.S. treasuries 5.00% 2.68%Investment grade credit 10.00% 4.25%High yield 2.00% 5.37%Private credit 6.00% 7.92%Real assets 2.50% 9.31%Real estate 7.50% 8.33%US Equity 28.00% 8.26%Non-US Developed Markets Equity 12.50% 9.00%Emerging markets equity 6.50% 11.37%Private Equity 12.00% 10.85%

100.00%

June 30, 2019

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6. Pension Plans (continued) Sensitivity of the State’s proportionate share of the net pension liability associated with the District to changes in the discount rate The following presents the net pension liability of the State as of June 30, 2019 calculated using the discount rate as disclosed above as well as what the State’s net pension liability would be if it calculated using a discount rate that is 1-percentage point lower or 1-percentage-point higher than the current rate:

At 1% At Current At 1%Decrease Discount Rate Increase

(4.60%) (5.60%) (6.60%)

State's proportionate share of the net pension liability associated with the District 171,215,287$ 145,193,512$ 123,603,656$

Pension plan fiduciary net position Detailed information about the pension plan’s fiduciary net position is available in the separately issued TPAF financial report. Additional Information Collective balances at June 30, 2019 are as follows: Collective pension expense for the plan for the measurement period ended June 30, 2019 is $3,619,822,314. The average of the expected remaining service lives of all employees that are provided with pension through the pension plan (active and inactive employees) determined at June 30, 2019, 2018, 2017, 2016, 2015 and 2014 is 8.04, 8.29, 8.30, 8.30, 8.30 and 8.50 years, respectively.

6/30/2019

Collective deferred outflows of resources 10,127,162,237$ Collective deferred inflows of resources 17,525,379,167 Collective net pension liability 61,370,943,870


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7. Post-retirement Benefits Plan Description The District contributes to the New Jersey State Health Benefits Program (the “SHBP”), a cost-sharing multiple-employer defined benefit postemployment healthcare plan administered by the State of New Jersey Division of Pension and Benefits. SHBP provide medical, prescription drug, mental health/substance abuse and Medicare Part B reimbursement to retirees and their covered dependents. The State Health Benefits Program Act is found in New Jersey Statutes Annotated, Title 52, Article 17.25 et.seq. Rules governing the operation and administration of the program are found in Title 17, Chapter 9 of the New Jersey Administrative Code. The State of New Jersey Division of Pension and Benefits issues a publicly available financial report that includes financial statements and required supplementary information for SHBP. That report may be obtained by writing to Division of Pension and Benefits, PO Box 295, Trenton, NJ 08625-0295. Funding Policy P.L. 1987, c.384 and P.L. 1990, c.6 required Teachers’ Pensions and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS), respectively, to fund post-retirement medical benefits for those state employees who retire after accumulating 25 years of credited service or on a disability retirement. P.L. 2007, c.103 amended the law to eliminate the funding of post-retirement medical benefits through the TPAF and PERS. It created separate funds outside of the pension plans for the funding and payment of post-retirement medical benefits for retired state employees and retired educational employees. The cost of these benefits is funded through contributions by the State in accordance with P.L. 1994, c.62. Funding of post–retirement medical benefits changed from a pre-funding basis to a pay-as-you-go basis beginning in Fiscal Year 1994. The State’s contributions to the State Health Benefits Plan for post-retirement benefits for the years ended June 30, 2020, 2019, 2018, and 2017, respectively, were $2,192,650, $2,154,785, $2,329,180, and $2,231,406. As the employer contributions for local government education employers are legally required to be funded by the State, this constitutes a special funding situation as defined by GASB Statement No. 75 and the State is treated as a non-employer contributing entity. The State is also responsible for the cost attributable P.L. 1992, c.126, which provides employer paid health benefits to members of PERS and the Alternate Benefit Program (APB) who retired from a board of education or county college with 25 years of service.

60




7. Post-retirement Benefits (continued) The School Employees Health Benefits Program (SEHBP) Act is found in New Jersey Statutes Annotated, Title 52, Article 17.25 et.seq. Rules governing the operation and administration of the program are found in Title 17, Chapter 9 of the New Jersey Administrative Code. The State provides OPEB benefits through a defined benefit OPEB plan that is not administered through a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. Total OPEB Liability The net OPEB liability from New Jersey’s plan is $41,729,081,045. The following employees were covered by the benefit terms:

The State, a non-employer contributing entity, is the only entity that has a legal obligation to make employer contributions to OPEB for qualified retired PERS and TPAF participants. The District’s proportionate share percentage determined under paragraphs 193 and 203 through 205 of GASBS No. 75 is zero percent. Accordingly, the District did not recognize any portion of the collective net OPEB liability on the Statement of Net Position. The State’s proportionate share of the net OPEB liability associated with the District as of June 30, 2019 was $91,014,921, or 0.22%. Additional information can be obtained from the State of New Jersey’s comprehensive annual financial report. Total Nonemployer OPEB Liability The total nonemployer OPEB liability as of June 30, 2019 was determined by an actuarial valuation as of June 30, 2018, which was rolled forward to June 30, 2019. The total nonemployer OPEB liability as of June 30, 2018 was determined by actuarial valuation as of June 30, 2018.

Local Education June 30, 2019

Active Plan Members 216,892 Inactive Plan Members or Beneficiaries Currently Receiving Benefits 148,051 Inactive Plan Members Entitled to but Not Yet Receiving Benefits - Total Plan Members 364,943

61




7. Post-retirement Benefits (continued) The actuarial assumptions vary for each plan member depending on the pension plan the member is enrolled in. Preretirement mortality rates were based on the Pub-2010 Health “Teachers” (TPAF/ABP) and, “General” (PERS) classification headcount-weighted morality table with fully generational mortality improvement projections from the central year using Scale MP-2019. Postretirement morality rates were based on the Pub-2010 “General” classification headcount-weighted mortality table with fully generational mortality improvement projections from the central year using Scale MP-2019. The actuarial assumptions used in the June 30, 2018 valuation were based on the results of actuarial experience studies for the periods July 1, 2015 – June 30, 2018, July 1, 2014 – June 30, 2018, for TPAF and PERS, respectively. Healthcare Trend Assumptions For pre-Medicare preferred provider organization (PPO) medical benefits, this amount initially is 5.7% and decreases to a 4.5% long-term trend rate after eight years. For post-65 medical benefits, the actual fully-insured Medicare Advantage trend rate for fiscal year 2002 are reflected. The assumed post-65 medical trend is 4.5% for all future years. For prescription drug benefits, the initial trend rate is 7.5% and decreases to a 4.5% long-term trend rate after eight years. For Medicare Part B reimbursement, the trend rate is 5.0%.

Inflation rate 2.50%

TPA/ABP PERS

Salary Increases:Through 2026 1.55 - 3.05% 2.00 - 6.00%

based in years of service

based in age

Thereafter 1.55 - 3.05% 3.00 - 7.00%based on years of

servicebased in age

62




7. Post-retirement Benefits (continued) Discount Rate The discount rate for June 30, 2019 was 3.50%. This represents the municipal bond return rate as chosen by the Division. The source is Bond Buyer Go 20-Bond Municipal Bond Index, which includes tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher. As the long-term rate of return is less than the municipal bond rate, it is not considered in the calculation of the discount rate, rather the discount rate is set at the municipal bond rate. Changes in the Total Nonemployer OPEB Liability

The following represents the change in the State’s proportionate share of the OPEB liability associated with the District: The following represents sensitivity of the State’s proportionate share of the net OPEB liability associated with the District to changes in the discount rate and healthcare cost trend rate.

1% DecreaseAt Current

Discount Rate 1% Increase

(2.50%) (3.50%) (4.50%)Net OPEB Liability (Allocable to the District

and the responsibility of the State) $ 107,524,588 $ 91,014,921 $ 77,900,546

Balance at June 30, 2019 100,883,111$

Increased by:Service cost 3,634,991$ Interest cost 3,992,889 Changes of assumptions 1,357,040 Member contributions 82,819

9,067,739 Decreased by:

Differences between expected and actual experience 16,142,042 Gross benefit payments 2,793,887

18,935,929

Balance at June 30, 2020 91,014,921$

63




Deferred outflows of resources 1,921,145,183$

Deferred inflows of resources (20,887,639,826)$

Collective OPEB expense 1,015,664,874$


7. Post-retirement Benefits (continued) The following presents the State’s proportionate share of the net OPEB liability associated with the District calculated using a healthcare cost trend rate that is 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rate:

OPEB Expense and Deferred Outflows of resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2019, the District recognized on-behalf OPEB expense and revenue in the government-wide financial statements of $2,192,650 for OPEB expenses incurred by the State. Collective balances of the Education Group at June 30, 2019 are as follows: 8. Interfund Receivables and Payables The total interfund receivables and payables for the District at June 30, 2020 are as follows:

Interfund InterfundFund Receivable Payable

General Fund 147,635$ 31,620$ Special Revenue Fund 147,635 Capital Projects Fund 480,062 Debt Service Fund 480,062 Childcare Programs Enterprise Fund 31,620

659,317$ 659,317$

The interfund receivable in the general fund results from a cash loan to the Special Revenue fund to clear a pooled cash deficit.

1% DecreaseHealthcare Cost

Trend Rates 1% Increase

Net OPEB Liability (Allocable to the District and the

responsibility of the State) $ 74,992,238 $ 91,014,921 $ 112,225,663

64




8. Interfund Receivables and Payables (continued) The interfund payable in the general fund results from a cash loan made to the Childcare Program Enterprise Fund. The interfund between the Capital Projects Fund and Debt Service Fund was established to remit interest earned in the Capital Projects Fund to the Debt Service fund for future debt service payments. 9. Economic Dependency The District receives a substantial amount of its support from federal and state governments. A significant reduction in the level of support, if this were to occur, could have an effect on the District’s programs and activities. 10. Contingent Liabilities The District participates in numerous state and federal grant programs, which are governed by various rules and regulations of the grantor agencies; therefore, to the extent that the District has not complied with the rules and regulations governing the grants, refunds of any money received may be required. In addition, the District is receiving funding from the New Jersey Schools Development Authority (NJSDA), in connection with its approved referendum project. The costs associated with the funding received from the NJSDA are subject to a final review of eligible costs and compliance by the New Jersey Department of Education and the NJSDA. To the extent that the District has not complied with the rules and regulations governing the NJSDA funds or has not met the final eligible costs requirements, refunds of any money received may be required. If necessary, the District has made adequate provisions for any potential questioned costs related to its grant programs. Infectious Disease Outbreak – COVID-19 COVID-19, a respiratory disease caused by a new strain of coronavirus, has been characterized as a pandemic (the "Pandemic") by the World Health Organization and is currently affecting many parts of the world, including the United States and the State of New Jersey. On January 31, 2020, the Secretary of the United States Department of Health and Human Services declared a public health emergency for the United States and, on March 13, 2020, the President of the United States declared the outbreak of COVID-19 in the United States a national emergency. Subsequently, the President's Coronavirus Guidelines for America and the United States Centers for Disease Control and Prevention called upon Americans to take actions to slow the spread of COVID-19 in the United States.

In New Jersey, Governor Murphy declared a state of emergency on March 9, 2020, and has since issued multiple Executive Orders regarding the Pandemic.

65




10. Contingent Liabilities (continued)

The District expects ongoing actions will be taken by State, federal and local governments and private entities to mitigate the spread and impacts of the Pandemic. The Pandemic has negatively affected travel, commerce and financial markets globally, and is widely expected to continue negatively affecting economic growth and financial markets worldwide.

The District cannot reasonably predict how long the Pandemic in New Jersey is expected to last, how the outbreak may impact the financial condition or operations of the District, any unexpected deferrals of tax payments, and/or state or federal aid to the District or the costs associated with this or any other potential infectious disease outbreak, including whether there will be any reduction in State funding or an increase in operational costs of the District.

11. Risk Management The District is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disasters. Property and Liability Insurance The District maintains commercial insurance coverage for property, liability, and student accident and surety bonds and does not retain risk of loss. A complete schedule of insurance coverage can be found in the Statistical Section of this report. There have been no significant reductions in insurance coverage from the prior year and no settlements have exceeded insurance coverage over the past three years. New Jersey Unemployment Compensation Insurance The District has elected to fund its New Jersey Unemployment Compensation Insurance under the “Benefit Reimbursement Method.” Under this plan, the District is required to reimburse the New Jersey Unemployment Trust Fund for benefits paid to its former employees and charged to its account with the State. The District is billed quarterly for amounts due to the State. The following is a summary of reimbursements to the State for benefits paid and the ending balance of the school District’s trust fund for the current and previous two years:

66




11. Risk Management (continued) Joint Insurance Pool The School District also participates in the Monmouth Ocean County Shared Service Fund and public entity risk pool. The pool provides its members with the following coverage: property – blanket building & grounds, boiler & machinery, School Board legal liability, general & automobile liability, workers’ compensation, and comprehensive crime coverage. 12. Deferred Compensation The School District offers its employees a choice of the following deferred compensation plans created in accordance with the Internal Revenue Code Section 403(b) and 457. The plans, which are administered by the entities listed below, permits participants to defer a portion of their salary until future years. Amounts deferred under the plans are not available to employees until termination, retirement, death or unforeseeable emergency. The plan administers are as follows: AXA Equitable, MetLife, Lincoln Investment Planning, Inc. Fidelity Investments, and Valic Investments. 13. Restricted Assets Restricted assets consist of funds set-aside in a capital reserve fund and maintenance reserve fund that are restricted pursuant to enabling legislation. 14. Transfers – Reconciliation The following presents a reconciliation of transfers during the fiscal year ended June 30, 2020:

In Out

General Fund $ 1,000,000 Capital Projects Fund $ 1,000,000 479,527 Debt Service Fund 479,527

$ 1,479,527 $ 1,479,527

Fiscal YearEmployee

ContributionsAmount

Reimbursed Ending Balance

2019-2020 74,497$ 172,404$ 127,441$ 2018-2019 75,854 69,094 225,348 2017-2018 90,838 81,859 218,588

67




14. Transfers – Reconciliation (continued) The $1,000,000 transfer between the General Fund and the Capital Projects fund was a budgeted withdrawal from capital reserves. The $479,527 transfer represents interest earned in the Capital Projects Fund remitted to the Debt Service fund for future debt service payments 15. Capital Reserve Account A capital reserve account was established by the District for the accumulation of funds for use as capital outlay expenditures in subsequent fiscal years. The capital reserve account is maintained in the general fund and its activity is included in the general fund annual budget. Funds placed in the capital reserve account are restricted to capital projects in the District’s approved Long Range Facilities Plan (LRFP). Upon submission of the LRFP to the Department of Education, a district may increase the balance in the capital reserve by appropriating funds in the annual general fund budget certified for taxes or by transfer by Board resolution at year-end (June 1 to June 30) of any unanticipated revenue or unexpended line – item appropriation amounts, or both. A district may also appropriate additional amounts when the express approval of the voters has been obtained either by a separate proposal at budget time or by a special question at one of the four special elections authorized pursuant to N.J.S.A. 19:60-2. Pursuant to N.J.A.C. 6A:23A-14.1(g), the balance in the account cannot at any time exceed the local support costs of uncompleted capital projects in its approved LRFP. The activity of the capital reserve for the July 01, 2019 to June 30, 2020 fiscal year is as follows: The June 30, 2020 LRFP balance of local support costs of uncompleted capital projects exceeded the amount in the capital reserve. 16. Maintenance Reserve Account A maintenance reserve account was established by the District by way of a Board approved resolution for the accumulation of funds for use as maintenance expenditures in subsequent fiscal years.

Beginning balance, July 1, 2019 $ 2,000,000

Increase:Deposit approved at the June 2020 Board meeting 500,000

Ending balance, June 30, 2020 $ 2,500,000

68




16. Maintenance Reserve Account (continued) The maintenance reserve account is maintained in the general fund and its activity is included in the general fund annual budget. Funds placed in the maintenance reserve account are restricted to maintenance projects in the District's approved Comprehensive Maintenance Plan (CMP). The activity of the maintenance reserve for the fiscal year ended June 30, 2020 is as follows:

Beginning balance, July 1, 2019 $ 1,950,968 Increase:

Deposit approved at the June 2020 Board meeting 437,345 Ending balance, June 30, 2020 $ 2,388,313

Upon submission of the CMP to the New Jersey Department of Education, the District may increase the balance in the maintenance reserve by appropriating funds in the annual general fund budget certified for taxes or by transfer by board resolution at year end (June 1 to June 30) of any unanticipated revenue or unexpended line - item appropriation amounts, or both. The District may also appropriate additional amounts when the express approval of the voters has been obtained either by a separate proposal at budget time or by a special question at one of the four special elections authorized pursuant to N.J.S.A. 19:60-2. Pursuant to NJ.AC. 6A:23A-14.2(g), the balance in the account cannot at any time exceed four percent of the replacement cost of the school district's school facilities for the current year. The balance in the maintenance reserve does not exceed four percent of the replacement cost of the school district's school facilities for the current year at June 30, 2020. 17. Commitments There was $9,486,465 of contractual commitments at June 30, 2020 to vendors related to ongoing construction projects which is reported as restricted for capital projects in the Capital Projects Fund. There were contractual commitments in the general fund in the amount of $1,399,573 and in the special revenue fund in the amount of $37,345 at June 30, 2020 which are reported as assigned to other purposes.

69

Required Supplementary Information – Part II

Schedules Related to Accounting and Reporting for Pensions and OPEBs

(GASB 68 and GASB 75)

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011

District's proportion of the net pension liability (asset) - Local Group 0.10522% 0.10535% 0.10699% 0.10202% 0.96340% 0.95330% 0.93620% N/A N/A N/A

District's proportionate share of the net pension liability (asset) 18,958,369$ 20,743,837$ 24,905,133$ 30,214,761$ 21,626,749$ 17,847,912$ 17,893,541$ N/A N/A N/A

District's covered-employee payroll 7,219,278$ 7,342,601$ 7,816,493$ 7,843,575$ 7,535,615$ 7,072,860$ N/A N/A N/A N/A

District's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll 262.61% 282.51% 318.62% 385.22% 286.99% 252.34% N/A N/A N/A N/A

Plan fiduciary net position as a percentage of the total pension liability - Local Group 56.27% 53.60% 48.10% 40.14% 47.93% 52.08% 48.72% N/A N/A N/A

The amounts presented for each fiscal year were determined as of the previous fiscal year-end.

N/A - information not available

Note to Required Supplementary Information

Benefit Changes

There were none.

Changes of Assumptions

The discount rate changed from 5.66% as of June 30, 2018 to 6.28% as of June 30, 2019.

June 30,

Holmdel Township School DistrictSchedule of the District's Proportionate Share of the Net Pension Liability

Public Employees' Retirement System

Last Ten Fiscal Years


70

2020 2019 2018 2017 2016 2015 2014 2013 2012 2011

Contractually required contribution 1,023,450$ 1,028,788$ 1,054,168$ 991,131$ 906,312$ 828,279$ 785,866$ N/A N/A N/A

Contributions in relation to the (1,023,450) (1,028,788) (1,054,168) (991,131) (906,312) (828,279) (785,866) N/A N/A N/A contractually required contribution

N/A N/A N/AContribution deficiency (excess) 1,023,450$ 1,028,788$ 1,054,168$ 991,131$ -$ -$ -$ -$ -$ -$

District's covered-employee payroll 7,219,278$ 7,342,601$ 7,816,493$ 7,843,575$ 7,535,615$ 7,072,860$ N/A N/A N/A N/A

Contributions as a percentage of covered-employee payroll 14.18% 14.01% 13.49% 12.64% 12.03% 11.71%

Holmdel Township School DistrictSchedule of District Contributions

Public Employees' Retirement System


June 30,


71

2020 2019 2018 2017 2016 2015 2014

State's proportion of the net pension liability (asset) associated with the District - Local Group 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

District's proportionate share of the net pension liability (asset) -$ -$ -$ -$ -$ -$ -$

State's proportionate share of the net pension liability (asset) associated with the District 145,193,512 152,096,376 160,527,896 185,493,497 149,028,526 128,555,940 122,905,106

Total proportionate share of the net pension liability (asset) associated with the District 145,193,512$ 152,096,376$ 160,527,896$ 185,493,497 149,028,526 128,555,940 122,905,106

Plan fiduciary net position as a percentage of the total pension liability 26.95% 28.22% 25.41% 22.33% 28.71% 33.64% 33.76%


* This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, governments should present information for those years for which information is available.

Covered payroll information is not presented since the Teachers' Pension and Annuity Fund is a special funding situation in which theDistrict does not make contributions to this plan.

Notes to Required Supplementary Information

Benefit Changes

There were none.

Changes of Assumptions

The discount rate changed from 4.68% as of June 30, 2018 to 5.60% as of June 30, 2019.

Holmdel Township School DistrictSchedule of the State's Proportionate Share of the Net Pension Liability Associated With the District

Teachers' Pension and Annuity Fund

Last Ten Fiscal Years*

June 30,


72

Year Ended June 30, Year Ended June 30, Year Ended June 30,2018 2019 2020

State's proportion of the OPEB Liability associated with the District - 0.22% 0.22% 0.22%

District's proportionate share of the OPEB liability -$ -$ -$

State's proportionate share of the OPEB liability associated with the District 115,969,509 100,883,111 91,014,921

Total proportionate share of the OPEB liability associated with the District 115,969,509$ 100,883,111$ 91,014,921$

Beginning Balance at July 1 124,961,251$ 115,969,509$ 100,883,111$

Increased by:Service cost 4,919,251 4,085,846 3,634,991 Interest cost 3,664,986 4,251,774 3,992,889 Changes of assumptions 1,357,040 Member contributions 98,909 93,233 82,819

8,683,146 8,430,853 9,067,739 Decreased by:

Diff. between expected and actual exp. - (11,576,842) (16,142,042) Changes of assumptions (14,988,788) (9,242,831) Gross benefit payments (2,686,100) (2,697,578) (2,793,887)

(17,674,888) (23,517,251) (18,935,929)

Balance 115,969,509$ 100,883,111$ 91,014,921$

Covered by employee payroll 35,055,197$ 33,303,773$ 33,336,235$

Total OPEB liability as a percentage of covered employee payroll. 330.82% 302.92% 273.02%

Benefit ChangesThere were none.

Changes of AssumptionsThe discount rate was 3.58% as of June 30, 2017, 3.87% as of June 30, 2018 and 3.50% as of June 30, 2019.

Notes to Required Supplementary Information

Holmdel Township School DistrictSchedule of the State's Proportionate Share of the OPEB Liability Associated With the District

State Health Benefit Local Education Retired Employees Plan

Last Ten Fiscal Years*

This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, governments should present information for those years for which information is available.



73

Required Supplementary Information – Part III

Budgetary Comparison Schedules

Original Budget FinalBudget Transfers Budget Actual

RevenuesLocal sources:

Local tax levy $ 55,660,279 $ 55,660,279 $ 55,660,279 Tuition from individuals 41,912 $ 41,912 Tuition from LEAs within state 241,136 241,136 Interest on investments 75,115 75,115 Other miscellaneous revenues 600,000 600,000 151,638 (448,362)

Total revenues - local sources 56,260,279 56,260,279 56,170,080 (90,199)

State sources:Categorical transportation aid 721,124 721,124 721,124 Extraordinary aid 269,058 269,058 725,149 456,091 Categorical special education aid 1,722,321 1,722,321 1,722,321 Categorical security aid 139,118 139,118 139,118 Other state aid 27,056 27,056 On-behalf TPAF pension

contributions (non-budgeted) 5,240,677 5,240,677 On-behalf TPAF Post-Retirement Medical

contributions (non-budgeted) 1,944,195 1,944,195 On-behalf TPAF Long- Term Disability Insurance

contributions (non-budgeted) 3,772 3,772 Reimbursed TPAF social security

contributions (non-budgeted) 1,860,239 1,860,239 Total - state sources 2,851,621 2,851,621 12,383,651 9,532,030

Federal sources:Medical reimbursement 20,357 20,357 24,093 3,736

Total federal sources 20,357 20,357 24,093 3,736 Total revenues 59,132,257 59,132,257 68,577,824 9,445,567

ExpendituresCurrent expenditures:

Instruction - regular programs:Salaries of teachers:

Preschool/kindergarten 575,184 $ 73,449 648,633 632,808 15,825 Grades 1-5 6,090,972 (69,585) 6,021,387 5,795,014 226,373 Grades 6-8 4,240,727 (87,326) 4,153,401 4,002,581 150,820 Grades 9-12 5,882,593 (192,604) 5,689,989 5,454,534 235,455

Home instruction - regular programs:Salaries of teachers 26,629 26,629 22,526 4,103 Purchased professional-educational services 8,000 8,000 6,901 1,099

Undistributed instruction - regular programs:Purchased professional-educational services 9,500 (9,000) 500 350 150 Other purchased services 1,115 99 1,214 279 935 General supplies 723,226 25,481 748,707 650,054 98,653 Textbooks 245,941 (20,136) 225,805 160,676 65,129 Other objects 143,250 76 143,326 143,326

Total instruction - regular programs 17,947,137 (279,546) 17,667,591 16,869,049 798,542

Budgetary Comparison Schedule

p. 1C-1

Holmdel Township School DistrictGeneral Fund

Final to ActualVariance

(Budgetary Basis)


74

(Budgetary Basis)

Original Budget FinalBudget Transfers Budget Actual

Expenditures (continued)Current expenditures (continued):

Learning and/or language disabilities:Salaries of teachers $ 140,469 $ 15,454 $ 155,923 $ 152,041 $ 3,882 Other salaries for instruction 328,098 44,060 372,158 363,083 9,075 General supplies 1,000 1,000 862 138

Total learning and/or language disabilities 469,567 59,514 529,081 515,986 13,095

Visual impairments:Salaries of teachers 210,830 210,830 205,729 5,101 Purchased professional ed services 7,600 7,600 7,600

Total visual impairments: 218,430 - 218,430 205,729 12,701

Multiple disabilities:Salaries of teachers 392,683 392,683 382,619 10,064 Other salaries for instruction 509,008 (97,547) 411,461 401,423 10,038 General supplies 4,500 4,500 1,716 2,784

Total multiple disabilities 906,191 (97,547) 808,644 785,758 22,886

Resource room/center:Salaries of teachers 3,819,762 103,668 3,923,430 3,827,731 95,699 General supplies 22,000 1,351 23,351 18,371 4,980 Textbooks 1,500 1,500 1,500

Total resource room/center 3,843,262 105,019 3,948,281 3,846,102 102,179

Preschool disabilities - part time:Salaries of teachers 144,451 12,694 157,145 153,307 3,838 Other salaries for instruction 94,303 160,754 255,057 248,831 6,226 General supplies 500 500 297 203

Total preschool disabilities - part time 239,254 173,448 412,702 402,435 10,267

Home instruction:Salaries of teachers 52,500 52,500 38,304 14,196 Purchased professional-educational services 15,000 13,000 28,000 10,677 17,323

Total home instruction 67,500 13,000 80,500 48,981 31,519

Total special education 5,744,204 253,434 5,997,638 5,804,991 192,647

VarianceFinal to Actual

(continued)p. 2C-1




75

C-1p. 3

(continued)

Original Budget Final VarianceBudget Transfers Budget Actual Final to Actual


Basic skills/remedial - instruction:Salaries of teachers $ 545,390 $ 87,326 $ 632,716 $ 617,278 $ 15,438

Total basic skills/remedial - instruction 545,390 87,326 632,716 617,278 15,438

Bilingual education - instruction:Salaries of teachers 115,819 14,066 129,885 126,715 3,170

General supplies 760 760 337 423 Total bilingual education - instruction 116,579 14,066 130,645 127,052 3,593

School - sponsored cocurricular activities:Salaries 202,771 2,878 205,649 197,113 8,536 Purchased services 9,468 395 9,863 7,506 2,357

Total school spn. cocurricular activities 212,239 3,273 215,512 204,619 10,893

School - sponsored athletics - instruction:Salaries 454,879 (1,850) 453,029 438,663 14,366 Supplies and materials 57,274 8,641 65,915 51,869 14,046 Other objects 104,724 2,642 107,366 97,591 9,775

Total school - sponsored athletics - instruction 616,877 9,433 626,310 588,123 38,187

Total instruction 25,182,426 87,986 25,270,412 24,211,112 1,059,300

Undistributed expenditures:Instruction:

Tuition to county voc. School dist. - regular 648,695 80,312 729,007 729,007 Tuition to county voc. School dist. - special 4,500 4,500 2,700 1,800 Tuition to CSSD and regional day schoolsTuition to private schools for the

disabled - within state 643,854 (183,445) 460,409 354,343 106,066 Tuition to private schools disabled

& other LEAs-Spl, O/S St 16,103 16,103 16,103 Total instruction 1,313,152 (103,133) 1,210,019 1,086,050 123,969

General FundHolmdel Township School District

Budgetary Comparison Schedule(Budgetary Basis)


76

C-1p. 4

(continued)

Original Budget Final Variance

Budget Transfers Budget Actual Final to Actual


Health services:Salaries $ 448,360 $ 448,360 $ 331,308 117,052$ Purchased professional and

technical services 74,830 $ 57,384 132,214 95,339 36,875 Supplies and materials 9,161 500 9,661 7,779 1,882 Other objects 243,735 (95,029) 148,706 41,708 106,998

Total health services 776,086 (37,145) 738,941 476,134 262,807

Speech, OT, PT, and related servicesrelated services:

Salaries 950,671 5,600 956,271 932,907 23,364 Purchased professional educational services - 8,844 8,844 8,844 Supplies and materials 23,530 17,900 41,430 33,839 7,591 Other objects 209,480 (8,844) 200,636 165,005 35,631

Total Speech, OT, PT, and related services 1,183,681 23,500 1,207,181 1,140,595 66,586

Other support services - students - extra services:

Salaries 1,418,322 (154,739) 1,263,583 1,207,275 56,308 Purchased professional educational services 55,200 55,200 28,973 26,227 Supplies and materials 3,800 3,800 826 2,974

Total other support services - students - extra services 1,477,322 (154,739) 1,322,583 1,237,074 85,509

Guidance:Salaries of other professional staff 995,014 995,014 969,780 25,234 Salaries of secretarial and clerical assistants 151,126 151,126 134,423 16,703 Purchased professional educational services 85,000 32,334 117,334 117,334 Supplies and materials 15,055 15,055 10,262 4,793 Other objects 3,229 3,229 1,390 1,839

Total guidance 1,249,424 32,334 1,281,758 1,233,189 48,569

Child Study Team:Salaries of other professional staff 1,214,696 1,214,696 1,082,402 132,294 Salaries of secretarial and clerical assistants 64,640 62,705 127,345 127,014 331 Other purchased professional - technical services 8,732 8,732 6,532 2,200 Supplies and materials 13,500 (125) 13,375 11,556 1,819 Other objects 18,034 (2,220) 15,814 5,797 10,017

Total child study team 1,319,602 60,360 1,379,962 1,233,301 146,661




77

C-1p. 5

(continued)




Undistributed expenditures (continued):Improvement of instructional services:

Salaries of supervisors of instruction $ 675,419 $ 675,419 $ 656,624 $ 18,795 Salaries of other professional staff 221,598 $ (9,281) 212,317 175,919 36,398 Salaries of secretaries and clerical assistants 370,670 9,281 379,951 369,789 10,162 Other purchased prof. and tech. services 20,000 41,350 61,350 47,832 13,518 Other purchased services 2,835 2,835 321 2,514 Supplies and materials 1,780 1,780 1,288 492 Other objects 17,203 298 17,501 9,469 8,032

Total improvement of instructional services 1,309,505 41,648 1,351,153 1,261,242 89,911

Educational media services/school library:Salaries 854,727 (310) 854,417 824,089 30,328 Supplies and materials 34,152 (28) 34,124 31,022 3,102

Total educational media services/school library 888,879 (338) 888,541 855,111 33,430

Instructional staff training services:Salaries of other professional staff 70,661 70,661 69,275 1,386 Other objects 66,925 5,830 72,755 40,873 31,882

Total instructional staff training services 137,586 5,830 143,416 110,148 33,268

Support services-general administration:

Salaries 269,520 269,520 269,189 331 Legal services 140,000 35,323 175,323 171,844 3,479 Audit fees 35,000 35,000 35,000 Other purchased professional services 42,000 3,508 45,508 43,352 2,156 Travel 1,000 1,000 256 744 Communications/telephone 71,745 310 72,055 64,801 7,254 Miscellaneous purchased professional services 67,680 67,680 46,760 20,920 General supplies 33,500 (1,878) 31,622 11,827 19,795 BOE membership dues and fees 14,350 14,350 6,930 7,420

Total support services-general administration 674,795 37,263 712,058 649,959 62,099

General FundHolmdel Township School District



(Budgetary Basis)

78

C-1p. 6

(continued)




Undistributed expenditures (continued):Support services-school administration:

Salaries of principals/asst.principalsprogram directors $ 1,153,221 $ 1,153,221 $ 1,130,622 22,599$

Salaries of secretarial and clerical assistants 479,459 479,459 468,257 11,202 Supplies and materials 17,000 220$ 17,220 9,970 7,250 Other objects 16,385 16,385 11,447 4,938

Total support services-school administration 1,666,065 220 1,666,285 1,620,296 45,989

Central services:Salaries 878,635 878,635 838,519 40,116 Purchased professional services 5,100 5,100 5,100 Interest on current loans 54,655 54,655 39,221 15,434 Miscellaneous expenditures 5,000 5,000 3,122 1,878

Total central services 943,390 - 943,390 885,962 57,428

Administrative information technology:Salaries 63,480 1,623 65,103 65,103 Other objects 3,000 3,000 1,015 1,985

Total administrative information technology 66,480 1,623 68,103 66,118 1,985

Required maintenance for school facilities:Salaries 603,174 603,174 540,971 62,203 Cleaning, repair and maintenance services 585,653 19,388 605,041 558,575 46,466 General supplies 241,300 3,698 244,998 194,419 50,579

Total required maintenance for school facilities 1,430,127 23,086 1,453,213 1,293,965 159,248

Custodial Services:Salaries 1,981,225 1,981,225 1,823,209 158,016 Salaries of Non-Instructional Aides 418,994 47,471 466,465 448,764 17,701 Purchased professional and technical services 14,950 14,950 3,342 11,608 Cleaning, repair and maintenance services 42,000 42,000 41,753 247 Other purchased property services 202,300 202,300 195,045 7,255 Insurance 546,471 5,093 551,564 551,282 282 General supplies 132,400 132,400 107,429 24,971 Energy - Natural gas 283,800 283,800 218,370 65,430 Energy - Electricity 412,500 412,500 412,500 Other Objects 17,500 17,500 5,616 11,884 Energy savings impr prog bonds - interest 45,222 45,222 45,222 Energy savings impr prog bonds - principal 124,000 124,000 124,000

Total custodial services 4,221,362 52,564 4,273,926 3,976,532 297,394

Care & upkeep of grounds:Salaries 230,857 230,857 199,608 31,249 Cleaning, repair and maintenance services 195,000 195,000 184,335 10,665 General supplies 45,000 45,000 35,958 9,042

Total care & upkeep of grounds 470,857 - 470,857 419,901 50,956




79



Undistributed expenditures (continued):Security

Salaries 99,002$ (42,221)$ 56,781$ 48,531$ 8,250$ Purchased professional and technical services 180,000 143,000 323,000 93,510 229,490

Total Security 279,002 100,779 379,781 142,041 237,740

Student transportation services:Salaries for pupil transportation:

Between home and school - regular 74,460 74,460 74,460 Other than between home & school 180,700 180,700 97,032 83,668

Other purchased prof. and tech. services 455 455 455 Contracted services:

Vendors - special ed 557,259 189,855 747,114 668,476 78,638 Vendors - between home & school 1,630,992 (83,768) 1,547,224 1,547,224 Joint agreements - special ed 377,686 62,221 439,907 386,603 53,304 Aid in lieu - nonpublic 43,000 30,855 73,855 48,796 25,059

Miscellaneous purchased services 4,133 79 4,212 4,212 General supplies 2,000 (900) 1,100 1,061 39 Transportation supplies 6,000 6,000 1,292 4,708 Other objects 2,550 900 3,450 2,655 795

Total student transportation services 2,879,235 199,242 3,078,477 2,831,811 246,666

Unallocated benefits:Social security contributions 841,400 841,400 758,168 83,232 Other retirement contributions - PERS 1,140,100 1,140,100 1,099,570 40,530 Unemployment compensation 25,000 25,000 25,000 Worker's compensation 517,482 (5,172) 512,310 507,735 4,575 Health insurance 10,360,325 (373,942) 9,986,383 9,338,895 647,488 Tuition reimbursement 120,000 120,000 105,000 15,000 Other employee benefits 175,000 37,833 212,833 97,731 115,102

Total unallocated benefits 13,179,307 (341,281) 12,838,026 11,932,099 905,927

On-behalf TPAF pensioncontributions ( non-budgeted) 5,240,677 (5,240,677)

On-behalf TPAF Post-Retirement Medical contributions (non-budgeted) 1,944,195 (1,944,195)

On-behalf TPAF Long- Term Disability Insurance contributions (non-budgeted) 3,772 (3,772)

Reimbursed TPAF social securitycontributions ( non-budgeted) 1,860,239 (1,860,239)

Total personal services: benefits 13,179,307 (341,281) 12,838,026 20,980,982 (8,142,956)

Total undistributed expenditures 35,465,857 (58,187) 35,407,670 41,500,411 (6,092,741) Total current expenditures 60,648,283 29,799 60,678,082 65,711,523 (5,033,441)

C-1




(continued)p. 7

(Budgetary Basis)

80

C-1p. 8


Expenditures (continued)Capital outlay:

Equipment:Undistributed expenditures:

Instruction 91,459$ (7,153)$ 84,306$ 84,305$ 1$ Non-instructional 22,000 22,000 8,447 13,553

Total equipment 113,459 (7,153) 106,306 92,752 13,554

Facilities acquisition and construction services:Lease purchase agreements - principal 301,000 301,000 301,000 Assessment for debt service of SDA funding 69,515 69,515 69,515

Total facilities acquisition and construction services 370,515 - 370,515 370,515 -

Total expenditures - capital outlay 483,974 (7,153) 476,821 463,267 13,554

Total expenditures 61,132,257 22,646 61,154,903 66,174,790 (5,019,887)(Deficiency) excess of revenues (under)

over expenditures (2,000,000) (22,646) (2,022,646) 2,403,034 4,425,680

Other financing (uses):Transfers out (capital projects fund) (1,000,000) (1,000,000) (1,000,000)

Total other financing (uses) (1,000,000) - (1,000,000) (1,000,000) - (Deficiency) excess of revenues (under) over

expenditures and other financing sources (uses) (3,000,000) (22,646) (3,022,646) 1,403,034 4,425,680

Fund balances, July 1 8,641,378 8,641,378 8,641,378 Fund balances, June 30 $ 5,641,378 $ (22,646) $ 5,618,732 $ 10,044,412 $ 4,425,680

Recapitulation of (deficiency) excess of revenues (under)over expenditures and other financing sources (uses)

Budgeted fund balance $ (2,000,000) $ (2,000,000) $ 2,425,680 $ 4,425,680 Withdrawal from capital reserve (1,000,000) (1,000,000) (1,000,000)Adjustment for prior year encumbrances $ (22,646) (22,646) (22,646)Total $ (3,000,000) $ (22,646) $ (3,022,646) $ 1,403,034 $ 4,425,680

Recapitulation of fund balance:Restricted for:

Maintenance reserve 2,388,313$ Capital reserve 2,500,000

Assigned to:Year end encumbrances 1,399,573 Designated for subsequent year's expenditures 2,110,861

Unassigned fund balance 1,645,665 10,044,412

Reconciliation to Government Funds Statements GAAP:Last two state aid payments not recognized on GAAP basis (247,767)

Fund balance per Government Funds (GAAP) (B-1) 9,796,645$

(continued)Holmdel Township School District

General Fund



81

C-2


Revenues:State sources 544,877$ 197,595$ 742,472$ 655,540$ (86,932)$ Federal sources 837,593 141,225 978,818 978,818 Other sources 103,861 103,861 51,928 (51,933)

Total revenues 1,382,470 442,681 1,825,151 1,686,286 (138,865)

Expenditures:Current expenditures:

Instruction: Salaries of teachers 118,653 (3,419) 115,234 115,234 Purchased professional technical services 414,202 84,238 498,440 421,528 76,912 Tuition 473,822 132,193 606,015 606,015 Supplies and materials 10,691 63,800 74,491 71,156 3,335 Other Objects 500 500 500

Total instruction 1,017,368 277,312 1,294,680 1,213,933 80,747

Support services:Salaries of teachers 25,749 (2,440) 23,309 23,309 Personal services–employee benefits 25,743 9,508 35,251 35,251 Purchased professional technical services 42,381 4,851 47,232 47,208 24 Purchased professional educational services 160,489 2,807 163,296 163,296 Other purchased professional services 10,090 5,424 15,514 15,014 500 Supplies and materials 3,059 46,010 49,069 1,471 47,598 Other Objects 9,297 (9,297)

Total support services 276,808 56,863 333,671 285,549 48,122

Capital outlay:Facilities acquisition and construction services: Construction services 74,418 122,382 196,800 186,804 9,996

Instructional equipment 13,876 (13,876) Total facilities acquisition and construction services 88,294 108,506 196,800 186,804 9,996

Total expenditures 1,382,470 442,681 1,825,151 1,686,286 138,865 Excess of revenues over

expenditures -$ -$ -$ -$ -$


Holmdel Township School DistrictSpecial Revenue Fund


82

C-3

Note A - Explanation of Differences between Budgetary Inflows and Outflows and GAAP Revenues and Expenditures:

Special General Revenue

Fund FundSources/inflows of resourcesActual amounts (budgetary basis) "revenue" from the

budgetary comparison schedule (C-1, C-2) 68,577,824$ 1,686,286$

Differences - Budget to GAAP:

Grant accounting budgetary basis differs from GAAP in that encumbrances are recognized as expenditures, and the related revenue is recognized. Prior year 238,228 Current year (37,345)

State aid payments recognized for budgetary purposes,not recognized for GAAP statements. Prior year 221,079 Current year (247,767)

Total revenues as reported on the statement of revenues, expenditures and changes in fund balances - governmental funds (B-2) 68,551,136$ 1,887,169$

Uses/outflows of resourcesActual amounts (budgetary basis) "total outflows" from the

budgetary comparison schedule (C-1, C-2) 66,174,790$ 1,686,286$

Differences - budget to GAAP:

Encumbrances for supplies and equipment ordered butnot received are reported in the year the order is placed forbudgetary purposes, but in the year the supplies are receivedfor financial reporting purposes.Prior year 238,228 Current year (37,345)

Total expenditures as reported on the statement of revenues,expenditures, and changes in fund balances - governmental funds (B-2) 66,174,790$ 1,887,169$

Holmdel Township School DistrictNote to Required Supplementary Information

Budget to GAAP Reconciliation


83

Special Revenue Fund

E-1p. 1

Title I Title II Title IVRegular Part B Part B Part A Drug FreePart A Regular Preschool Regular Regular

Revenues:State sourcesFederal sources 163,690$ 734,667$ 29,573$ 46,591$ 4,297$ Other sources

Total revenues 163,690$ 734,667$ 29,573$ 46,591$ 4,297$

Expenditures:Current expenditures:Instruction: Salaries of teachers 87,923$ 27,311$ Tuition 606,015$ Purchased professional technical services Supplies and materials 18,630 598$

Total instruction 106,553 606,015 27,311 598

Support services:Salaries of other professional staff 23,309 Personal services–employee benefits 32,989 2,262 Purchased professional technical servicesPurchased professional educational

services 127,112 32,584$ 3,600 Other purchased professional services 211 1,540 13,263 Supplies and materials 628 744 99

Total support services 57,137 128,652 2,262 46,591 3,699

Capital outlay:Facilities acquisition and construction services:

Construction servicesTotal capital outlay

Total expenditures 163,690$ 734,667$ 29,573$ 46,591$ 4,297$

I.D.E.A.



Combining Schedule of Revenues and Expenditures

Budgetary Basis

84

E-1p. 2

(continued)

Supple -Comp Exam & Corrective mentary Technology Home Text -

Ed ESL Class Speech Instruction Nursing Initiative Instruction books SecurityRegular Regular Regular Regular Regular Regular Regular Regular Regular RegularProgram Program Program Program Program Program Program Program Program Program

Revenues:State sources 82,173$ 1,489$ 65,392$ 12,067$ 73,630$ 117,255$ 47,208$ 575$ 68,947$ 186,804$ Federal sourcesOther sources

Total revenues 82,173$ 1,489$ 65,392$ 12,067$ 73,630$ 117,255$ 47,208$ 575$ 68,947$ 186,804$


Instruction: Salaries of teachers Tuition Purchased professional technical services 82,173$ 1,489$ 65,392$ 12,067$ 73,630$ 117,255$ 575$ 68,947$ Supplies and materials

Total instruction 82,173 1,489 65,392 12,067 73,630 117,255 575 68,947

Support services:Salaries of other professional staffPersonal services–employee benefitsPurchased professional technical services 47,208$ Purchased professional educational

servicesOther purchased professional servicesSupplies and materials

Total support services 47,208


Construction services 186,804$ Total capital outlay 186,804

Total expenditures 82,173$ 1,489$ 65,392$ 12,067$ 73,630$ 117,255$ 47,208$ 575$ 68,947$ 186,804$

New Jersey Non-Public Aid

Budgetary Basis




85

E-1p. 3

(continued)

LocalPrograms Totals

Revenues:State sources 655,540$ Federal sources 978,818 Other sources 51,928$ 51,928

Total revenues 51,928$ 1,686,286$


Instruction: Salaries of teachers 115,234$ Tuition 606,015 Purchased professional technical services 421,528 Supplies and materials 51,928$ 71,156

Total instruction 51,928 1,213,933

Support services:Salaries of other professional staff 23,309 Personal services–employee benefits 35,251 Purchased professional technical services 47,208 Purchased professional educational

services 163,296 Other purchased professional services 15,014 Supplies and materials 1,471

Total support services - 285,549


Construction services 186,804 Total capital outlay 186,804

Total expenditures 51,928$ 1,686,286$




Budgetary Basis

86

Revenues and other financing sourcesContribution from lease proceeds 815,476$

Total revenues 815,476

Expenditures and other financing sourcesConstruction and professional technical services 17,212,169 Equipment 847,234

Total expenditures 18,059,403

(Deficiency) of revenues (under) expenditures (17,243,927)

Other financing sourcesTransfers in 1,000,000 Total other financing sources 1,000,000

(Deficiency) of revenues (under) expenditures andother financing sources (16,243,927)

Fund Balance, July 1 30,552,212 Fund Balance, June 30 14,308,285$

Fund balance, budgetary-basis 14,308,285$ Less difference in grant revenue recognized (110,328) Fund balance, GAAP-basis 14,197,957$

Summary Schedule of Project Revenues, Expenditures,

(Budgetary Basis)

Project Balance and Project Status


F-1

Holmdel Township School DistrictCapital Projects Fund

87

RevisedPrior Current Authorized

Periods Year Totals Cost

Revenues and other financing sourcesState Sources - SDA Grant 8,888,137$ 8,888,137$ 8,888,137$ Contribution from bond proceeds 59,194,242 59,194,242 59,194,242 Contribution from lease proceeds 2,274,733 815,476$ 3,090,209 3,090,209 Transfer from Capital Reserve 1,323,000 1,000,000 2,323,000 2,323,000

Total revenues 71,680,112 1,815,476 73,495,588 73,495,588$

Expenditures and Other Financing UsesPurchased professional/tech services 5,682,346 680,383 6,362,729

Land and improvements 1,091,550 16,531,786 17,623,336 Construction services 33,366,138 33,366,138 Equipment 987,866 847,234 1,835,100

Total expenditures 41,127,900 18,059,403 59,187,303

Excess (deficiency) of revenues over (under) expenditures 30,552,212$ (16,243,927)$ 14,308,285$

From Inception and for the year ended June 30, 2020

F-1a

(Budgetary Basis)Schedule of Project Revenues, Expenditures, Project Balance and Project Status

Capital Projects FundHolmdel Township School District

88



Revenues and other financing sourcesState Sources - SDA Grant 8,006,137$ 8,006,137$ 8,006,137$ Contribution from bond proceeds 18,876,242 18,876,242 18,876,242 Contribution from private sourcesTransfer from Capital Reserve

Total revenues 26,882,379 - 26,882,379 26,882,379$

Expenditures and Other Financing UsesPurchased professional/tech services 2,721,206 2,721,206

Land and improvements

Construction services 23,926,327 23,926,327 Equipment 188,133 188,133

Total expenditures 26,835,666 - 26,835,666

Excess (deficiency) of revenues over (under) expenditures 46,713$ -$ 46,713$

Additional project information

Project number N/A Grant date 10/31/2001

Bond authorization date 12/11/2001 Bonds Authorized 18,876,242$ Bonds Issued 18,876,000 Original Authorized Cost 27,010,520 Additional Authorized Cost (174,612) Revised Authorized Cost 26,882,379

Percentage Decrease over Original Authorized Cost -0.47% Percentage completion 99.83% Original target completion date 9/2005 Revised target completion date 12/31/2020

F-1b

Renovations and Additions to Schools, Various Capital Projects & Purchase of Furniture and Equipment

(Budgetary Basis)



Schedule of Project Revenues, Expenditures, Project Balance and Project Status

89



Revenues and other financing sourcesState Sources - SDA GrantContribution from bond proceedsContribution from lease proceeds 799,733$ 799,733$ 799,733$ Transfer from Capital Reserve

Total revenues 799,733 - 799,733 799,733$

Expenditures and Other Financing UsesPurchased professional/tech services


Construction servicesEquipment 799,733 799,733

Total expenditures 799,733 - 799,733

Excess (deficiency) of revenues over (under) expenditures -$ -$ -$


Project number N/A Grant date N/A

Bond authorization date N/A Bonds Authorized N/A Bonds Issued N/A Original Authorized Cost 799,733$ Additional Authorized Cost N/A Revised Authorized Cost N/A Percentage Increase over Original Authorized Cost N/A Percentage completion 100% Original target completion date N/A Revised target completion date 06/2020

Schedule of Project Revenues, Expenditures, Project Balance and Project Status


(Budgetary Basis)

F-1c

MCIA Capital Equipment Lease - 2017


90



Revenues and other financing sourcesState Sources - SDA Grant 882,000$ 882,000$ 882,000$ Contribution from bond proceedsContribution from lease proceedsTransfer from Capital Reserve 1,323,000 1,323,000 1,323,000

Total revenues 2,205,000 - 2,205,000 2,205,000$



Construction services 1,929,171 1,929,171 Equipment


Excess (deficiency) of revenues over (under) expenditures 275,829$ -$ 275,829$


Project numbers: 2230-020-14-10032230-030-14-1003

2230-050-14-10052230-020-14-1002

Grant date 12/28/2018 Bond authorization date N/A Bonds Authorized N/A Bonds Issued N/A Original Authorized Cost 2,205,000$ Additional Authorized Cost - Revised Authorized Cost 2,205,000$

Percentage Increase over Original Authorized Cost 0.00% Percentage completion 87.49% Original target completion date 12/31/2021 Revised target completion date 12/31/2021


Schedule of Project Revenues, Expenditures, Project Balance and Project Status(Budgetary Basis)

Window Replacements - Various Schools


F-1d

91



Revenues and other financing sourcesState Sources - SDA GrantContribution from bond proceeds 40,318,000$ 40,318,000$ 40,318,000$ Contribution from lease proceedsTransfer from Capital Reserve

Total revenues 40,318,000 - 40,318,000 40,318,000$

Expenditures and Other Financing UsesPurchased professional/tech services 2,622,508 654,932$ 3,277,440

Land and improvements 16,531,786 16,531,786

Construction services 7,510,640 7,510,640 Equipment


Excess (deficiency) of revenues over (under) expenditures 30,184,852$ (17,186,718)$ 12,998,134$


Project number N/A Grant date 5/27/2014

Bond authorization date N/A Bonds Authorized N/A Bonds Issued N/A Original Authorized Cost 40,318,000$ Additional Authorized Cost - Revised Authorized Cost 40,318,000$




Educational, Athletic & Infrastructure Enhancements - Various Schools


F-1e

92



Revenues and other financing sourcesState Sources - SDA GrantContribution from bond proceedsContribution from lease proceeds 1,475,000$ 1,475,000$ 1,475,000$ Transfer from Capital Reserve 110,549$ 110,549 110,549

Total revenues 1,475,000 110,549 1,585,549 1,585,549$

Expenditures and Other Financing UsesPurchased professional/tech services 338,390 338,390

Land and improvements 1,091,550 1,091,550

Construction servicesEquipment -


Excess (deficiency) of revenues over (under) expenditures 45,060$ 110,549$ 155,609$



Bond authorization date N/A Bonds Authorized N/A Bonds Issued N/A Original Authorized Cost 1,475,000$ Additional Authorized Cost 110,549$ Revised Authorized Cost 1,585,549$


ESIP Lighting and Other Various Upgrades - Various Schools




F-1f

93



Revenues and other financing sourcesState Sources - SDA GrantContribution from bond proceedsContribution from lease proceeds 815,476$ 815,476$ 815,476$ Transfer from Capital Reserve

Total revenues -$ 815,476 815,476 815,476$




Total expenditures - 557,234 557,234

Excess (deficiency) of revenues over (under) expenditures -$ 258,242$ 258,242$



Bond authorization date N/A Bonds Authorized N/A Bonds Issued N/A Original Authorized Cost 815,476$ Additional Authorized Cost - Revised Authorized Cost 815,476$

Percentage Increase over Original Authorized Cost 0.00% Percentage completion 68.33% Original target completion date 9/1/2021 Revised target completion date N/A


MCIA Capital Equipment Lease - 2019


F-1g


94



Revenues and other financing sourcesState Sources - SDA GrantContribution from bond proceedsContribution from lease proceedsTransfer from Capital Reserve 315,451$ 315,451$ 315,451$

Total revenues -$ 315,451 315,451 315,451$

Expenditures and Other Financing UsesPurchased professional/tech services 25,451 25,451



Total expenditures - 315,451 315,451

Excess (deficiency) of revenues over (under) expenditures -$ -$ -$



Bond authorization date N/A Bonds Authorized N/A Bonds Issued N/A Original Authorized Cost 315,451$ Additional Authorized Cost - Revised Authorized Cost 315,451$




Boiler Project - Indian Hill School


F-1h


95



Revenues and other financing sourcesState Sources - SDA GrantContribution from bond proceedsContribution from lease proceedsTransfer from Capital Reserve 574,000$ 574,000$ 574,000$

Total revenues -$ 574,000 574,000 574,000$



Construction servicesEquipment

Total expenditures - - -

Excess (deficiency) of revenues over (under) expenditures -$ 574,000$ 574,000$



Bond authorization date N/A Bonds Authorized N/A Bonds Issued N/A Original Authorized Cost 574,000$ Additional Authorized Cost Revised Authorized Cost 574,000$


F-1i




Ultraviolet (Disinfecting) Light Project - Various Schools

96

F-2

Prior Current Transfer From UnexpendedIssue/Project Title Appropriations Years Year Capital Reserve Balance

Renovations of and Additions to Schools, Various Capital Projects & Purchase of Furniture and Equipment 26,882,379$ 26,835,666$ 46,713$

MCIA Capital Equipment Lease - 2017 799,733 799,733 MCIA Capital Equipment Lease - 2019 815,476 557,234$ 258,242 Windows - Various Schools 2,205,000 1,929,171 275,829 Educational, Athletic & Infrastructure Enhancements 40,318,000 10,133,148 17,186,718 12,998,134 ESIP Lighting and Various Upgrades 1,475,000 1,429,940 110,549$ 155,609 Boiler Project - Indian Hill School 315,451 315,451 315,451 Ultraviolet (Disinfecting) Light Project - Various Schools 574,000 574,000 574,000

73,385,039$ 41,127,658$ 18,059,403$ 1,000,000$ 14,308,527$

Expenditures to Date

June 30, 2020


Summary Schedule of Project Expenditures(Budgetary Basis)

97

Fiduciary Funds

H-1

Private-Purpose

Scholarship Unemployment Total Student Total Funds Compensation Trust Activity Payroll Agency

Assets Cash and cash equivalents $ 35,666 38,617$ $ 74,283 221,928$ 2,660,354$ 2,882,282$

Accounts receivable 164,883 164,883 25,000 25,000 Total assets 35,666 203,500 239,166 221,928 2,685,354 2,907,282

Liabilities Payroll deductions payable 303,949 303,949 Accounts payable 76,059 76,059 2,381,405 2,381,405 Due to student groups 221,928 221,928 Total liabilities - 76,059 76,059 221,928 2,685,354 2,907,282

Net position Held in trust for unemployment claims 127,441 127,441 Held in trust for scholarships 35,666 35,666 Total net position 35,666$ 127,441$ 163,107$

Holmdel Township School DistrictTrust and Agency Funds

Combining Statement of Fiduciary Net Position


Trust Agency

98

H-2

Private-Purpose

Scholarship Unemployment Funds Compensation Totals

Additions: Contributions $ 300 $ 74,497 $ 74,797 Total additions 300 74,497 74,797

Deductions: Unemployment claims paid 172,404 172,404 Total deductions - 172,404 172,404 Change in net position 300 (97,907) (97,607)

Net position, beginning 35,366 225,348 260,714 Net position, ending 35,666$ 127,441$ 163,107$

Holmdel Township School DistrictTrust Funds

Combining Statement of Changes in Fiduciary Net Position


99

H-3

Balance Balance July Cash Cash June

1, 2019 Receipts Disbursements 30, 2020

Assets:Cash and cash equivalentsSchools:

Holmdel High School Athletic Fund $ 3,946 $ 85,771 $ 77,937 $ 11,780 Holmdel High School Student Activity Account 93,575 223,475 159,357 157,693 Indian Hill School Student Activity Fund 34,168 37,306 42,438 29,036 Village School Student Activity Account 17,030 2,888 13,745 6,173 W.R. Satz School Student Activity Fund 1,159 155,330 151,857 4,632 W.R. Satz School Athletic Fund 57 13,000 11,910 1,147

Total Student Activity Fund 149,935 517,770 457,244 210,461

Activities:Summer Camp 11,465 2 11,467 Total assets 161,400$ 517,772$ 457,244$ 221,928$

Holmdel Township School DistrictStudent Activity Agency Fund

Statement of Cash Receipts and Cash Disbursements


100

H-4

Balance Balance July Cash Cash June

1, 2019 Receipts Disbursements 30, 2020

Assets Cash and cash equivalents $ 2,694,170 51,819,246$ $ 51,853,062 2,660,354$ Accounts receivable 25,000 25,000 Total assets 2,694,170 51,819,246 51,878,062 2,685,354

LiabilitiesPayroll deductions payable 22,182 49,145,827 48,864,060 303,949 Accounts payable 2,671,988 2,673,419 2,964,002 2,381,405 Total liabilities 2,694,170$ 51,819,246$ 51,828,062$ 2,685,354$

Holmdel Township School DistrictPayroll Agency Fund

Statement of Cash Receipts and Cash Disbursements


101

Long-Term Debt

I-1

Balance BalanceDate of Interest July June

Issue Issue Date Amount Rate 1, 2019 Retired 30, 2020

Refunding of 2015 Bonds 10/28/2015 $ 7,740,000 3/15/2021 1,100,000$ 4.000% $ 4,515,000 $ 1,115,000 $ 3,400,000 3/15/2022 1,090,000 4.000%3/15/2023 1,210,000 4.000%

General Obligation BondsSeries 2018 4/24/2018 40,318,000 2/1/2021 1,300,000 3.250 40,318,000 1,300,000 39,018,000

2/1/2022 1,365,000 3.2502/1/2023 1,300,000 3.2502/1/2024 1,938,000 3.2502/1/2025 1,975,000 3.2502/1/2026 2,035,000 3.2502/1/2027 2,095,000 3.2502/1/2028 2,155,000 3.2502/1/2029 2,220,000 3.2502/1/2030 2,295,000 3.2502/1/2031 2,370,000 3.2502/1/2032 2,445,000 3.2502/1/2033 2,525,000 3.2502/1/2034 2,600,000 3.2502/1/2035 2,600,000 3.3752/1/2036 2,600,000 3.3752/1/2037 2,600,000 3.5002/1/2038 2,600,000 3.500

$ 44,833,000 $ 2,415,000 $ 42,418,000

Amount of Annual Maturities Issue

Holmdel Township School DistrictLong-Term Debt

Schedule of Serial Bonds Payable

June 30, 2020

102

I-2

Balance BalanceDate of Term of Interest July June

Issue Lease Lease Principal Interest Rate 1, 2019 Additions Retired 30, 2020

2015 MCIA Equipment 10/8/2015 5 years 744,000$ 106,510$ 2.000-5.000 % $ 321,000 $ 157,000 $ 164,000

2017 MCIA Equipment 10/11/2017 5 years 747,000 109,666 4.000-5.000 % 617,000 144,000 473,000

2019 MCIA Equipment 10/16/2019 5 years 755,000 114,909 5.000 % $ 755,000 755,000

2018 Energy Savings Improvement Program 4/27/2018 15 years 1,475,000 410,763 3.545 % 1,306,600 124,000 1,182,600

$ 2,244,600 $ 755,000 $ 425,000 $ 2,574,600

Holmdel Township School DistrictLong-Term Debt

Schedule of Obligations Under Capital Leases

June 30, 2020

Amount of Original Lease

103

I-3


Revenues:Local sources:

Local tax levy 2,922,993$ 2,922,993$ 2,922,993$ State sources:

Debt Service Aid 723,575 723,575 723,575 Total revenues 3,646,568 3,646,568 3,646,568

Expenditures:Principal on bonds 2,415,000 2,415,000 2,415,000 Interest on bonds 1,510,435 1,510,435 1,510,435


Deficiency/(excess) of revenues under expenditures (278,867) (278,867) (278,867)

Other financing sources (uses)Transfers in 479,527 479,527$

Fund balance, July 1 917,409 917,409 917,409 Fund balance, June 30 638,542$ -$ 638,542$ 1,118,069$ 479,527$

Holmdel Township School DistrictDebt Service Fund



104

Statistical Section (Unaudited)

Other Information

Statistical SectionUnaudited

Contents

Financial Trends

Revenue Capacity

Debt Capacity

Demographic and Economic Information

Operating InformationThese schedules contain service and infrastructure data to help the reader understand how the information in the district's financial report relates to the services the district provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports (CAFR) for the relevant year.

These schedules contain trend information to help the reader understand how the district's financial performance and well being have changed over time.

These schedules contain information to help the reader assess the district's most significant local revenue source, the property tax.

These schedules present information to help the reader assess the affordability of the district' s current levels of outstanding debt and the district's ability to issue additional debt in the future.

These schedules offer demographic and economic indicators to help the reader understand the environment within which the district's financial activities take place.

105

J-1

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Governmental activitiesNet investment in capital assets 29,461,141$ 30,706,272$ 32,468,038$ 32,022,178$ 36,136,561$ 41,411,753$ 39,981,673$ 2,021,935$ 44,421,713$ 46,106,571$ Restricted 3,741,642 3,861,568 3,178,902 3,229,987 4,024,437 3,918,554 1,314,521 44,332,739 5,231,957 6,232,782 Unrestricted (deficit) 193,857 110,832 536,516 2,231,548 (18,185,134) (21,737,003) (19,924,435) (20,001,708) (20,075,176) (19,795,416)

Total governmental activities net position 33,396,640$ 34,678,672$ 36,183,456$ 37,483,713$ 21,975,864$ 23,593,304$ 21,371,759$ 26,352,966$ 29,578,494$ 32,543,937$

Business-type activitiesInvestment in capital assets 25,096$ 18,272$ 12,816$ 8,283$ 5,014$ 45,077$ 41,296$ 54,810$ 48,559$ 89,693$ Unrestricted 842,809 926,343 1,005,613 1,104,679 234,175 1,353,994 1,661,476 2,004,224 640,453 514,065

Total business-type activities net position 867,905$ 944,615$ 1,018,429$ 1,112,962$ 239,189$ 1,399,071$ 1,702,772$ 2,059,034$ 689,012$ 603,758$

District-wideNet investment in capital assets 29,486,237$ 30,724,544$ 32,480,854$ 32,030,461$ 36,141,575$ 41,456,830$ 40,022,969$ 2,076,745$ 44,470,272$ 46,196,264$ Restricted 3,741,642 3,861,568 3,178,902 3,229,987 4,024,437 3,918,554 1,314,521 44,332,739 5,231,957 6,232,782 Unrestricted (deficit) 1,036,666 1,037,175 1,542,129 3,336,227 (17,950,959) (20,383,009) (18,262,959) (17,997,484) (19,434,723) (19,281,351)

Total district net position 34,264,545$ 35,623,287$ 37,201,885$ 38,596,675$ 22,215,053$ 24,992,375$ 23,074,531$ 28,412,000$ 30,267,506$ 33,147,695$

Source: CAFR Schedule A-1 and District records.

Notes: GASB 63 was implemented in the 2013 fiscal year, which required the reclassification of balances previously reported as net assets to net position.

GASB 68 was implemented during the 2015 fiscal year, which required the restatement of beginning net position in the amount of $31,810,285. This amount is not reflected in the June 30, 2014 Net Position, above.

Holmdel Township School DistrictNet Position by Component


(accrual basis of accounting)Unaudited

June 30,

106

J-2p.1

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Expenses

Governmental activities Instruction (29,598,124)$ (30,701,743)$ (23,069,139)$ (23,223,017)$ (23,546,118)$ (23,999,528)$ (24,207,792)$ (47,707,941)$ (45,123,562)$ (41,543,568)$

Support services: Tuition (1,112,963) (976,976) (944,986) (1,086,353) (1,091,888) (1,210,030) (1,302,565) (2,110,183) (1,806,541) (1,745,707) Student & Instruction Related Services (8,862,150) (9,162,159) (7,897,495) (7,602,496) (7,722,598) (7,982,066) (8,071,936) (12,259,534) (11,814,609) (10,482,147) School Administrative Services (1,781,416) (1,825,571) (1,424,352) (1,462,340) (1,508,715) (1,517,276) (1,517,821) (859,615) (857,666) (2,646,776) General administration (886,157) (826,526) (567,061) (595,703) (640,945) (589,819) (633,485) (1,275,574) (2,787,087) (834,730) Central Services (1,120,560) (1,086,021) (1,159,659) (761,297) (827,851) (804,968) (848,939) (88,017) (1,570,038) (1,425,438) Administrative Information Technology (51,265) (54,285) (53,921) (55,400) (57,001) (58,874) (59,686) (2,228,569) (109,453) (107,918) Plant operations & maintenance (7,574,763) (9,243,614) (6,629,954) (6,466,333) (5,812,803) (5,935,866) (5,959,314) (8,754,012) (8,155,816) (8,107,811) Pupil transportation (3,008,797) (2,293,063) (2,234,729) (2,473,004) (2,529,060) (2,739,126) (2,743,808) (3,967,280) (3,128,120) (3,026,137) Employee benefits (14,171,537) (13,845,065) (20,306,796) (23,803,361) (18,852,441) Interest on long-term debt (860,350) (873,936) (755,989) (785,967) (596,009) (647,845) (397,033) (443,500) (1,422,833) (1,410,366) Unallocated depreciation and amortization (782,663) (778,845) (948,409) (1,333,877) (881,860) (730,814) (845,072)

Total governmental activities (55,639,208) (57,822,739) (59,857,231) (59,690,852) (65,521,644) (70,019,573) (65,439,892) (79,694,225) (76,775,725) (71,330,598)

Business-type activities:Food service (1,244,817) (1,303,735) (1,295,986) (1,297,381) (1,372,242) (1,363,947) (1,270,466) (1,235,326) (1,413,816) (966,160) Childcare programs (207,777) (214,255) (190,113) (195,071) (425,614) (413,051) (406,452) (476,568) (580,107) (217,222)

Total business-type activities expense (1,452,594) (1,517,990) (1,486,099) (1,492,452) (1,797,856) (1,776,998) (1,676,918) (1,711,894) (1,993,923) (1,183,382) Total district expenses (57,091,802)$ (59,340,729)$ (61,343,330)$ (61,183,304)$ (67,319,500)$ (71,796,571)$ (67,116,810)$ (81,406,119)$ (78,769,648)$ (72,513,980)$

Program RevenuesGovernmental activities:

Charges for services - Instruction (tuition) 238,270$ 368,221$ Charges for services - support services - tuition 436,062$ 389,993$ 407,835$ 481,597$ 575,567$ 501,246$ 283,048$ Operating grants and contributions 14,743 26,309 1,495,762 1,316,644 12,274,445 14,545,145 1,641,813 21,419,236$ 1,635,067 1,854,180 Capital grants and contributions 8,000

Total governmental activities program revenues 253,013 394,530 1,931,824 1,706,637 12,682,280 15,026,742 2,217,380 21,419,236 2,144,313 2,137,228

Business-type activities:Charges for services

Food service 1,450,535 1,393,294 1,360,620 1,305,863 1,325,674 1,305,801 1,388,441 1,478,602 1,436,958 949,613 Childcare programs 221,288 201,405 199,296 230,622 552,722 576,584 553,722 589,554 657,179 117,886

Total business type activities program revenues 1,671,823 1,594,699 1,559,916 1,536,485 1,878,396 1,882,385 1,942,163 2,068,156 2,094,137 1,067,499 Total district program revenues 1,924,836$ 1,989,229$ 3,491,740$ 3,243,122$ 14,560,676$ 16,909,127$ 4,159,543$ 23,487,392$ 4,238,450$ 3,204,727$

Net (Expense)/RevenueGovernmental activities (55,386,195)$ (57,428,209)$ (57,925,407)$ (57,984,215)$ (52,839,364)$ (54,992,831)$ (63,222,512)$ (58,274,989)$ (74,631,412)$ (69,193,370)$ Business-type activities 219,229 76,709 73,817 44,033 80,540 105,387 265,245 356,262 100,214 (115,883) Total district-wide net expense (55,166,966)$ (57,351,500)$ (57,851,590)$ (57,940,182)$ (52,758,824)$ (54,887,444)$ (62,957,267)$ (57,918,727)$ (74,531,198)$ (69,309,253)$

Holmdel Township School DistrictChanges in Net Position Last Ten Fiscal Years


Year Ended June 30,

107

J-2p.2

(continued)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

General Revenues and Other Changes in Net AssetsGovernmental activities:

Property taxes levied for general purposes 47,180,371$ 47,180,371$ 47,770,126$ 48,450,529$ 49,414,695$ 50,648,047$ 52,197,343$ 53,241,290$ 53,906,806$ 55,660,279$ Taxes levied for debt service 3,160,520 3,113,858 3,051,483 2,971,232 2,800,957 2,794,727 2,494,218 2,483,081 2,990,356 2,922,993 Unrestricted grants and contributions 6,965,580 7,474,329 8,353,200 7,563,872 2,714,555 2,627,277 9,334,333 3,424,423 18,467,401 12,869,261 Investment earnings 4,973 738,544 554,642 Miscellaneous income 301,574 541,681 255,383 430,375 207,141 320,155 151,597 305,506 253,833 151,638 Restricted grants and entitlements 105,698 220,075 28,455 596,917 Transfers 1,500,000

Total governmental activities 57,613,018 58,310,239 59,430,192 59,416,008 55,243,046 56,610,281 64,205,946 60,051,217 77,856,940 72,158,813

Business-type activities:Investment earnings 28 Miscellaneous income 29,764 30,629 Transfers 50,499 45,687 54,495 38,456 (1,500,000)

Total business-type activities 28 - - 50,499 45,687 54,495 38,456 - (1,470,236) 30,629 Total district-wide 57,613,046$ 58,310,239$ 59,430,192$ 59,466,507$ 55,288,733$ 56,664,776$ 64,244,402$ 60,051,217$ 76,386,704$ 72,189,442$

Change in Net PositionGovernmental activities 2,226,823$ 882,030$ 1,504,785$ 1,431,793$ 2,403,682$ 1,617,450$ 983,434$ 1,776,228$ 3,225,528$ 2,965,443$ Business-type activities 219,257 76,709 73,817 94,532 126,227 159,882 303,701 356,262 (1,370,022) (85,254) Total district 2,446,080$ 958,739$ 1,578,602$ 1,526,325$ 2,529,909$ 1,777,332$ 1,287,135$ 2,132,490$ 1,855,506$ 2,880,189$

Source: CAFR Schedule A-2 and District records.

Note: GASB 63 was implemented in the 2013 fiscal year, which required the reclassification of balances previously reported as net assets to net position.

Year Ended June 30,

Holmdel Township School DistrictChanges in Net Position Last Ten Fiscal Years


108

J-3

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

General FundReserved 1,358,880$ 2,340,278$ 3,099,131$ 2,981,372$ 2,967,645$ Unreserved 1,119,138 831,399 240,949 415,315 816,304 Restricted 251,916 180,145 103,549 1,504,979$ 2,962,560$ 4,968,794$ 4,888,313$ Assigned 2,053,284$ 1,524,075 1,955,222 2,004,820 3,510,434 Unassigned 582,764 1,885,784 1,427,302 1,446,685 1,397,898

Total general fund 2,636,048$ 2,729,934$ 3,351,822$ 3,443,629$ 3,396,687$ 3,783,949$ 4,914,838$ 6,345,084$ 8,420,299$ 9,796,645$

All Other Governmental FundsReserved reported in: Capital projects fund

Debt service fundRestricted reported in:

Capital projects fund 31,266$ 48,114$ 31,266$ 125,289$ 46,471$ 1,040,135$ 996,679$ 41,300,474$ 30,441,884$ 14,197,957$ Debt service fund 1 1 69,705 917,409 1,118,069

Unreserved (deficit), reported in:Capital projects fund 15,206 18,122 15,206

Assigned, reported in:Debt service fund 62,470 1 100,765 1

Total all other governmental funds 46,472$ 66,237$ 46,473$ 187,759$ 46,472$ 1,140,900$ 996,680$ 41,370,179$ 31,359,293$ 15,316,026$

Source: CAFR Schedule B-1 and District records.

Note 1: GASB #54 was implemented in the 2011 fiscal year, which required the presentations of fund balances to be reportedin different classifications from those presented in prior years. Prior years have not been restated above and are not required to be.

June, 30

Holmdel Township School DistrictFund Balances - Governmental Funds


(modified accrual basis of accounting)Unaudited

109

J-4

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Revenues

Local sources:Local tax levy 49,785,650$ 50,340,891$ 50,294,229$ 50,821,609$ 51,421,761$ 52,215,652$ 53,442,774$ 54,691,561$ 55,724,371$ 56,897,162$ 58,583,272$ Tuition charges 217,385 238,270 368,221 436,062 389,993 407,835 481,597 575,567 596,917 501,246 283,048 Interest earnings 4,973 738,544 554,642 Miscellaneous 220,078 301,574 541,681 295,592 451,751 246,629 294,350 186,602 344,244 294,516 320,442

Total local sources 50,223,113 50,885,708 51,204,131 51,553,263 52,263,505 52,870,116 54,218,721 55,453,730 56,665,532 58,431,468 59,741,404

State sources 7,549,327 5,696,654 6,801,622 8,832,495 8,045,997 8,475,459 9,313,976 9,926,261 11,676,116 12,531,925 13,827,398 Federal sources 1,427,739 1,283,573 1,099,016 976,258 806,917 936,994 854,791 1,043,335 949,602 1,003,707 995,598

Total revenue 59,200,179 57,865,935 59,104,769 61,362,016 61,116,419 62,282,569 64,387,488 66,423,326 69,291,250 71,967,100 74,564,400

ExpendituresIntrsuction: Regular instruction 15,969,314 15,728,483 15,893,613 17,241,917 17,205,888 17,264,938 17,567,455 17,657,280 17,528,145 25,591,180 16,869,049

Special education instruction 4,119,680 4,185,660 4,198,398 4,505,111 4,619,880 4,931,631 5,123,476 5,187,350 5,266,072 5,929,991 Other special instruction 587,808 495,565 547,908 621,996 698,285 626,652 555,063 587,638 2,750,266

School-Sponsored/Other Instruction 742,163 753,124 689,942 700,115 698,964 740,897 767,862 775,524 1,446,345 1,086,050 Undistributed:

Tuition 1,064,117 1,112,963 976,976 944,986 1,086,353 1,091,888 1,210,030 1,302,565 1,470,147 1,256,378 1,140,595 Student and instruction related services 7,897,495 7,602,496 7,722,598 7,982,066 8,071,936 7,886,554 1,117,653 3,974,415 Health services 598,549 635,324 654,564 603,361 476,134 Support services - students 5,145,944 5,071,430 642,581 598,887 6,369,847 2,116,353 Support services - instructional staff 851,824 873,116 5,361,581 888,682 112,997 110,148 General administration 511,329 492,514 887,646 567,061 595,703 640,945 589,819 633,485 649,052 649,959 School administrative services 1,476,994 1,442,768 440,816 1,424,352 1,462,340 1,508,715 1,517,276 1,517,821 61,321 1,608,965 1,620,296 Central services 1,175,857 1,126,613 1,455,006 1,159,659 761,297 827,851 804,968 848,939 1,552,626 925,838 885,962

Admin. Information technology 21,463 51,265 1,086,021 53,921 55,400 57,001 58,874 59,686 6,079,111 63,064 66,118 Plant operations and maintenance 5,884,296 5,974,533 54,285 6,550,875 6,466,333 5,812,803 5,935,866 5,959,314 5,830,812 5,832,439 Pupil transportation 2,696,853 2,452,411 7,220,703 2,234,729 2,473,004 2,529,060 2,739,126 2,743,808 2,763,972 2,865,485 2,831,811 Employee benefits 14,367,404 11,470,208 2,204,895 14,186,141 13,858,310 14,458,376 15,916,589 16,660,955 18,518,582 20,011,604 20,980,982

Capital outlay 827,929 494,228 12,333,765 523,377 1,083,549 874,714 1,709,503 92,291 2,959,667 11,515,339 18,800,794 Special revenue 2,015,118 1,825,701 857,430 Debt Service: 1,555,252 Principal 2,155,000 2,170,000 2,200,000 2,230,000 2,300,000 2,285,000 2,300,000 2,624,000 2,494,000 1,685,000 2,415,000 Interest and other charges 1,066,164 990,520 913,858 821,483 682,530 578,426 486,083 419,497 352,596 1,196,196 1,536,016 Total expenditures 61,277,806 57,346,426 59,520,676 61,663,218 61,650,332 61,951,495 65,264,056 65,142,089 70,521,271 81,402,771 90,072,378

(Deficiency) excess of revenues (under) over expenditures (2,077,627) 519,509 (415,907) (301,202) (533,913) 331,074 (876,568) 1,281,237 (1,230,021) (9,435,671) (15,507,978)

Other Financing sources (uses)Proceeds from bond issuance 5,699,361 8,430,680 41,793,000 Cancellation of prior year accounts payable 37,890 Payment to escrow agent (5,625,594) (8,338,560) Transfers in 158,549 1,323,000 2,238,544 1,479,527 Transfers out (158,549) (1,323,000) (738,544) (1,479,527) Proceeds from MCIA lease 500,000 726,000 744,000 747,000 755,000 Premium on lease 86,057

Total other financing sources (uses) - - 500,000 - 799,767 - 874,010 - 42,540,000 1,500,000 841,057

Net change in fund balances (2,077,627) 519,509 84,093 (301,202) 265,854 331,074 (2,558) 1,281,237 41,309,979 (7,935,671) (14,666,921)

Fund balance, July 1 , as restated - (2,077,627) (1,558,118) (1,474,025) (1,775,227) (1,509,373) 5,126,605 5,124,047 6,405,284 47,715,263 39,779,592

Fund balance, June 30 (2,077,627)$ (1,558,118)$ (1,474,025)$ (1,775,227)$ (1,509,373)$ (1,178,299)$ 5,124,047$ 6,405,284$ 47,715,263$ 39,779,592$ 25,112,671$

Debt service as a percentage ofnoncapital expenditures 5.55% 5.83% 5.52% 5.21% 5.08% 4.85% 8.46% 4.90% 4.21% 4.12% 5.54%

Source: District records

Note: Noncapital expenditures are total expenditures less capital outlay.The beginning fiscal year 2016 fund balance was restated as a direct result of the implementation of Governmental Accounting Standards Board Statement No.72, Fair Measurement and Application.

Changes in Fund Balances - Governmental FundsLast Ten Fiscal Years

Year Ended June 30,

(modified accrual basis of accounting)Unaudited

110

J-5

Year Ended June 30,

Tuition from Individuals

Tuition from Other LEAs Miscellaneous

Interest on Investments

Prior Years' Refunds Rental Income Annual Totals

2011 86,720$ 151,550$ 126,665$ 4,973$ 19,226$ 104,092$ 493,226$ 2012 98,065 270,156 378,216 126,622 873,059 2013 115,163 320,899 17,812 59,857 177,714 691,445 2014 107,414 282,579 22,987 713 210,339 132,922 756,954 2015 333,209 74,626 14,774 785 105,390 86,192 614,976 2016 69,020 400,492 44,945 4,708 120,492 106,095 745,752 2017 106,436 491,857 (13,117) 12,153 39,111 90,724 727,164 2018 523,660 5,839 67,418 87,175 95,894 779,986 2019 28,363 472,883 185,359 10,074 58,400 755,079 2020 50,841 232,207 61,052 75,115 54,380 36,206 509,801


Holmdel Township School DistrictGeneral Fund - Other Local Revenue by Source


Unaudited(modified accrual basis of accounting)

111

J-6

Year Ended

June 30, Vacant Land Residential Farm Reg. Qfarm Commercial Industrial ApartmentTotal Assessed

Value*Tax Exempt

Property Public Utilities aNet Valuation

Taxable*

Total Direct School Tax

Rate b

2011 39,307,000$ 3,357,071,100$ 16,884,500$ 1,153,900$ 351,317,300$ 56,906,900$ 8,955,700$ 2,222,071,000$ 387,393,500$ 7,757,167$ 3,451,960,067$ 1.310$ 2012 37,997,200 3,364,124,999 17,876,500 1,121,700 349,171,600 54,984,000 7,715,300 2,192,735,250 388,531,100 6,793,745 3,451,253,944 1.325 2013 40,447,700 3,358,515,299 18,887,700 1,039,200 340,138,200 62,643,700 7,715,300 3,829,387,099 388,449,600 6,481,288 3,447,418,787 1.341 2014 42,676,700 3,352,543,699 15,544,000 1,008,100 339,525,100 62,643,700 7,715,300 3,821,656,599 389,407,700 6,481,288 3,441,733,187 1.363 2015 67,212,400 3,575,479,300 17,828,300 988,100 357,433,400 48,932,400 8,450,000 4,076,323,900 6,690,727 4,083,014,627 1.309 2016 73,610,200 3,597,054,500 17,216,200 912,000 378,721,400 50,838,200 8,975,000 4,127,327,500 6,679,675 4,134,007,175 1.323 2017 82,545,200 3,591,420,200 17,301,400 885,200 382,805,000 37,361,900 9,510,600 4,121,829,500 6,703,393 4,128,532,893 1.350 2018 87,003,500 3,661,677,300 17,745,700 864,300 399,092,000 37,933,600 9,651,800 4,213,968,200 6,830,315 4,220,798,515 1.348 2019 67,554,600 3,723,175,100 19,175,800 890,300 405,760,500 38,334,500 9,755,300 4,264,646,100 6,934,879 4,271,580,979 1.372 2020 59,134,900 3,787,165,900 18,756,900 889,800 382,502,100 41,957,200 9,819,500 4,241,091,400 554,593,400 7,099,933 4,248,191,333 1.385

Source: District records, Tax list summary & Municipal Tax Assessor & Collector, abstract of ratables, County Board of Taxation.

Note:

Reassessment occurs when the County Board of Taxation requests Treasury to order a reassessment.

a Taxable Value of Machinery, Implements and Equipment of Telephone, Telegraph and Messenger System Companies.

b Tax rates are per $100

Holmdel Township School DistrictAssessed Value and Actual Value of Taxable Property


Unaudited

Real property is required to be assessed at some percentage of true value (fair or market value) established by each county board of taxation.

112

J-7

Year Ended June 30, Basic Rate a

General Obligation

Debt Service b

(From J-6) Total Direct School

Tax RateHolmdel

TownshipMonmouth

County

2011 N/A N/A 1.31$ 0.38$ 0.31$ 2.00$ 2012 N/A N/A 1.33 0.40 0.33 2.05 2013 N/A N/A 1.34 0.39 0.33 2.06 2014 N/A N/A 1.36 0.37 0.32 2.06 2015 N/A N/A 1.31 0.34 0.32 1.96 2016 N/A N/A 1.32 0.32 0.32 1.96 2017 N/A N/A 1.35 0.25 0.26 1.87 2018 N/A N/A 1.35 0.37 0.30 2.02 2019 N/A N/A 1.37 0.37 0.29 2.03 2020 N/A N/A 1.39 0.34 0.24 1.96

Source: District Records and Municipal Tax Collector.

a

b Rates for debt service are based on each year's requirements.

Holmdel Township School District Direct Rate

The district's basic tax rate is calculated from the A4F form which is submitted with the budget and the Net valuation taxable.

Holmdel Township School DistrictProperty Tax Rates-Direct and Overlapping Governments

Last Ten Fiscal Years(rate per $100 of assessed value)

Unaudited

Overlapping Rates

Total Direct and Overlapping

Tax Rate

113

J-8

Taxable % of Total Taxable % of TotalAssessed District Net Assessed District Net

Value Assessed Value Value Assessed Value

Kimco Realty Corp 50,000,000$ 1.17% 55,564,500$ 1.40%Holmdel Commons, LLC C/O Kimco Realty 50,000,000 1.17% 51,911,100 1.20%Mack-Cali Holmdel LLC-D Danscuk 40,938,100 0.96% 34,000,000 0.90%Hlm Plzlp/Gbr Hlmllc C/O Natl Rlty 28,622,200 0.67% 20,000,000 0.50%Holmdel Realty Development LLC 28,446,500 0.67% N/A 0.00%Lowe's Home Ctr/Tax Dept 17,000,000 0.40% 19,295,400 0.45%Holmdel Investments, LLC 10,475,300 0.25% 11,701,200 0.31%Eighteen Realty Company 10,618,400 0.25% 8,612,700 0.22%Holmdel Venture/Bergman Realty 7,587,100 0.18% 8,774,700 0.22%Safeguard Properties, LLC 7,652,900 0.18% 4,968,000 0.22%LTI-NJ Finance 6,346,300 0.15% 5,731,300 0.70%Croddick Real Estate Holdings, LLC N/A 0.00% 20,588,100 0.49%

Total 257,686,800$ 5.88% 241,147,000$ 6.61%

Source: District CAFR & Holmdel Municipal Tax Assessor.*Data as of December 31, 2019 (Township's year end). June 30, 2020 data was not available as of the issuance of this report.

Holmdel Township School DistrictPrincipal Property Tax Payers

Current Year and Nine Years Ago

Unaudited

2020 2011

114

J-9

AmountPercentage

of Levy AmountPercentage

of Levy

2011 50,340,891$ 50,340,891$ 100.00% 50,340,891$ 100.00%2012 50,294,229 50,294,229 100.00% 50,294,229 100.00%2013 50,821,609 50,821,609 100.00% 50,821,609 100.00%2014 51,421,761 51,421,761 100.00% 51,421,761 100.00%2015 52,215,652 52,215,652 100.00% 52,215,652 100.00%2016 53,442,774 53,442,774 100.00% 53,442,774 100.00%2017 54,691,561 54,691,561 100.00% 54,691,561 100.00%2018 55,724,371 55,724,371 100.00% 55,724,371 100.00%2019 56,897,162 56,897,162 100.00% 56,897,162 100.00%2020 58,583,272 58,583,272 100.00% 58,583,272 100.00%

Source: District records including the Certificate and Report of School Taxes (A4F form).

a.

Collections in

Subsequent Years

Total Collections to Date

School Taxes are collected by the Municipal Tax Collector. Under New Jersey State Statute, a municipality is required to remit to the school district the entire property tax balance, in the amount prior to the end of the school year.

Holmdel Township School DistrictProperty Tax Levies and Collections


Unaudited

Year Ended June 30,

Taxes Levied for the Fiscal Year

Collected within the Fiscal Year of the Levy a

115

J-10

Year Ended June 30,

General Obligation Bonds b

Certificates of Participation Capital Leases Total District

Percentage of Personal Income a Per Capita a

2011 22,485,000$ 981,900$ 23,466,900$ 2.06% 1,399$ 2012 20,285,000 1,140,800 21,425,800 1.71% 1,276.10 2013 18,055,000 723,000 18,778,000 1.50% 716.00 2014 15,660,000 1,195,000 16,855,000 1.62% 1,008.38 2015 10,645,000 1,302,000 11,947,000 1.14% 715.65 2016 10,645,000 1,302,000 11,947,000 1.09% 716.63 2017 8,400,000 923,000 9,323,000 0.81% 561.49 2018 46,518,000 2,851,000 49,369,000 4.16% 2,966.89 2019 44,833,000 2,244,600 47,077,600 4.01% 2,827.82 2020 42,418,000 2,574,600 44,992,600 3.77% 2,689.18

Source: District CAFR Schedules I-1, I-2 and District records.Note: Details regarding the District's outstanding debt can be found in Note 5 to the basic financial statements.

a See J-14 for personal income and population data. These ratios are calculated using personal income andpopulation for the prior calendar year.

Holmdel Township School DistrictRatios of Outstanding Debt by Type


Unaudited

Governmental Activities

116

J-11

Year Ended

June 30,General

Obligation Bonds

Net Unamortized Premium and

Deferred Interest Costs

Resources Restricted for Repayment of

Debt

Net General Bonded Debt Outstanding

Percentage of Actual Taxable

Value of Propertya Per Capita b

2011 34,152,000$ 34,152,000$ 1.54% 20362012 20,285,000 20,285,000 0.93% 12082013 18,055,000 1$ 18,054,999 0.47% 10822014 15,660,000 62,470 15,597,530 0.41% 9332015 10,645,000 1 10,644,999 0.26% 6382016 10,645,000 100,765 10,544,235 0.26% 6322017 8,400,000 8,400,000 0.20% 5062018 46,518,000 69,705 46,448,295 1.10% 27912019 44,833,000 917,409 43,915,591 1.03% 26382020 42,418,000 1,118,069 41,299,931 0.97% 2468

Source:a See J-6 for property tax data. b Population data can be found in J-14.

Note: Details regarding the District's outstanding debt can be found in note 5 to the basic financial statements.

Holmdel Township School DistrictRatios of Net General Bonded Debt Outstanding


Unaudited

General Bonded Debt Outstanding

117

J-12

Governmental Unit Debt Outstanding Estimated Percentage Applicable a

Estimated Share of

Overlapping Debt

Debt repaid with property taxes

Township of Holmdel 26,935,000$ 100.000% 26,935,000$ Monmouth County General Obligation Debt - Township's share 1,223,065,000 3.360% 41,094,984

Subtotal, overlapping debt 68,029,984

Holmdel School District Direct Debt 41,299,931

Total direct and overlapping debt 109,329,915$

Sources: Debt outstanding data provided by each governmental unit.

Note:

a. For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable value that is within the district's boudaries and dividing it by each unit's total taxable value.

Holmdel Township School DistrictDirect and Overlapping Governmental Activities Debt

As of June 30, 2020

Unaudited

Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the District. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Holmdel. This process recognizes that, when considering the District's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping payment.

118

J-13

Legal Debt Margin Calculation for Fiscal Year 2020

Equalized valuation basis2018 4,220,798,515$ 2019 4,271,580,979 2020 4,363,082,814

[A] 12,855,462,308$

Average equalized valuation of taxable property [A/3] 4,285,154,102.67$

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Debt limit 178,548,846$ 172,423,442$ 168,559,253$ 163,973,953$ 162,676,626$ 163,785,344$ 165,668,654$ 167,450,770$ 113,231,727$ 171,406,164$

Total net debt applicable to limit 22,485,000 20,285,000 18,055,000 15,660,000 13,375,000 10,645,000 8,400,000 46,518,000 44,833,000 41,299,931

Legal debt margin 156,063,846$ 152,138,442$ 150,504,253$ 148,313,953$ 149,301,626$ 153,140,344$ 157,268,654$ 120,932,770$ 68,398,727$ 130,106,233$

Total net debt applicable to the limitas a percentage of debt limit 12.59% 11.76% 10.71% 9.55% 8.22% 6.50% 5.07% 27.78% 39.59% 24.09%

Source: Equalized valuation bases were obtained from the Annual Report of the State of New Jersey, Department of Treasury, Division of Taxation.

a Limit set by NJSA 18A:24-19 for a K through 12 district; other % limits would be applicable for other district types.

Holmdel Township School DistrictLegal Debt Margin Information


Unaudited

119

J-14

Year Population a Personal Income b Per Capita Unemployment

2011 16,773$ 1,138,165,461$ 67,857$ 8.57%2012 16,790 1,256,261,380 74,822 9.39%2013 16,688 1,248,629,536 74,822 8.63%2014 16,715 1,038,335,800 62,120 6.76%2015 16,694 1,047,665,358 62,757 4.80%2016 16,671 1,100,602,749 66,019 4.80%2017 16,604 1,152,483,640 69,410 3.80%2018 16,640 1,185,383,680 71,237 3.60%2019 16,648 1,174,616,288 70,556 3.70%2020 16,731 1,193,890,698 71,358 2.80%

Source: a Population information provided by the NJ Dept of Labor and Workforce Development.

d Unemployment data provided by the NJ Dept of Labor and Workforce Development.

* Information is the latest available as of 2019

Holmdel Township School DistrictDemographic and Economic Statistics


Unaudited

b Personal income has been estimated based upon the municipal population and per capita personal income presented.c Per capita personal income by municipality estimated based upon the 2010 Census published by the US Bureau of Economic Analysis.

120

J-15

Employer

# of Employees/ Employee

Size RangeRank

[Optional]

Percentage of Total

Municipal Employment

# of Employees/ Employee

Size RangeRank

[Optional]

Percentage of Total

Municipal Employment

Bell Works 1001-5000Vonage 1800-2200iCIMS 800-1000Bayshore Medical Center 501-1000PNC Bank Arts Center 200-500Workwave 225Intuitive Technology Partners 50-200Pierce Professional Resources 50-200Holmdel School District 478Holmdel Township 136

Source: Township of Holmdel

Not Available

Holmdel Township School DistrictPrincipal Employers

Current Year and Nine Years Ago

Unaudited

2020 2011

121

J-16

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Function/Program

Instruction:Regular 195.00 196.10 197.20 196.50 197.70 205.00 204.50 205.40 219.10 213.00Special Education 69.00 68.50 68.10 70.00 79.30 80.00 80.00 80.00 91.00 93.00

Support Services:TuitionStudent and Instruction Related Services 93.50 92.90 99.30 105.00 109.00 111.50 99.00 97.00 91.00 88.00General Administrative Services 6.00 6.00 7.00 7.00 5.00 5.00 5.00 5.00 5.00 4.00School Administrative Services 17.00 17.00 16.50 17.00 17.00 17.00 17.00 17.00 17.00 17.00Business Administrative Services 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 5.00Information Technology 2.50 5.50 5.50 5.50 5.50 5.00 6.00 6.00 6.00 6.00Plant Operations and Maintenance 48.50 48.50 48.50 48.50 48.50 48.50 48.50 48.50 42.00 40.00Pupil Transportation 23.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.00 1.00

Total 461.00 442.00 449.60 457.00 469.50 479.50 467.50 466.40 478.10 467.00

Source: District personnel records

Holmdel Township School DistrictFull-time Equivalent District Employees By Function/Program


Unaudited

122

J-17

Average Average PercentageDaily Daily Change in Student

Fiscal Operating Cost Per Percentage Teaching Middle Senior Enrollment Attendance Average Daily AttendanceYear Enrollment Expendituresa Pupil Change Staffb Elementary School High School (ADE)c (ADA)d Enrollment Percentage

2011 3,215 53,691,582$ 17,023$ 1.57% 264 - - - 3,151 3,068 -1.93% 97.38%2012 3,156 55,601,183 18,000 5.74% 265 - - - 3,089 3,013 -1.97% 97.54%2013 3,089 53,012,874 18,781 4.34% 265 - - - 3,091 3,011 0.06% 97.41%2014 3,092 53,227,846 19,074 1.56% 267 - - - 3,019 2,944 -2.33% 97.52%2015 3,021 53,114,932 17,582 -7.82% 277 - - - 3,027 2,883 0.26% 95.24%2016 2,975 54,873,393 18,445 4.91% 283 - - - 2,973 2,850 -1.78% 95.86%2017 3,002 55,335,677 18,433 -0.06% 284 3,002 2,857 0.97% 95.17%2018 3,004 57,188,165 19,037 3.28% 285 3,004 2,840 0.07% 94.55%2019 2,986 58,370,553 19,548 2.68% 307 2,996 2,851 -0.27% 95.15%2020 2,971 67,320,568 22,659 15.92% 301 2,981 2,871 -0.50% 96.31%


Note: Enrollment based on annual October District count.

a Operating expenditures equal total expenditures less debt service and capital outlay.b Teaching staff includes only full-time equivalents of certificated staff.c Average daily enrollment and average daily attendance are obtained from the School Register Summary (SRS).

Holmdel Township School DistrictOperating Statistics


Unaudited

Pupil/Teacher Ratio

123

J-18

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020District Building

ElementaryVillage School (1952)

Square Feet 122,104 122,104 122,104 122,104 122,104 122,104 122,104 122,104 122,104 122,104 Capacity (students) 1,032 1,032 1,032 1,032 1,032 1,032 1,032 1,032 1,032 1,032 Enrollment 841 835 831 835 821 805 824 796 751 775

Indian Hill (1961)Square Feet 120,733 120,733 120,733 120,733 120,733 120,733 120,733 120,733 120,733 120,733 Capacity (students) 940 940 940 940 940 940 940 940 940 940 Enrollment 767 732 733 711 707 713 735 757 752 747

Junior High SchoolWR Satz Jr. High (1962)

Square Feet 86,537 86,537 86,537 86,537 86,537 86,537 86,537 86,537 86,537 93,061 Capacity (students) 669 669 669 669 669 669 669 669 669 669 Enrollment 557 541 504 538 531 513 522 514 521 528

High SchoolHolmdel High School (1958)

Square Feet 193,021 193,021 193,021 193,021 193,021 193,021 193,021 193,021 193,021 202,135 Capacity (students) 1,173 1,173 1,173 1,173 1,173 1,173 1,173 1,173 1,173 1,173 Enrollment 1,050 1,048 1,021 1,008 962 944 921 937 962 937

Other

Number of Schools at June 30, 2020:Elementary = 2Junior High School = 1High School = 1

Source: District Facilities Office, District Records


Unaudited

Holmdel Township School DistrictSchool Building Information

124

J-19

UNDISTRIBUTED EXPENDITURES - REQUIREDMAINTENANCE FOR SCHOOL FACILITIES11-000-261-xxx

*School Facilities Holmdel William R. IndianProject # (s) High School Satz Hill Village Total

2011 N/A 519,738$ 277,401$ 288,567$ 326,919$ 1,412,625$ 2012 N/A 998,342 328,709 333,673 1,182,474 2,843,198 2013 N/A 1,241,906 278,900 375,391 356,326 2,252,523 2014 N/A 762,754 287,704 610,089 349,147 2,009,694 2015 N/A 505,306 224,668 277,516 314,356 1,321,846 2016 N/A 495,154 241,165 324,607 362,881 1,423,807 2017 N/A 474,567 218,233 295,806 321,995 1,310,601 2018 N/A 484,936 286,201 303,856 345,137 1,420,130 2019 N/A 452,449 205,941 276,120 347,500 1,282,010 2020 N/A 442,702 222,558 293,779 334,926 1,293,965

Total School Facilities 6,377,854$ 2,571,479$ 3,379,404$ 4,241,661$ 16,570,399$

* School facilities as defined under EFCFA.(N.J.A.C. 6A:26-1.2 and N.J.A.C. 6A:26-1.3)


Holmdel Township School DistrictSchedule of Required Maintenance


Unaudited

125

J-20

Coverage Deductible

School Package Policy (1):Building and Contents (All Locations) $ 162,023,998 $ 10,000Comprehensive General Liability 31,000,000Comprehensive Automobile Liability 31,000,000Comprehensive Crime Coverage:

Money and Securities 25,000 500Comprehensive Crime Coverage:

Forgery and Alteration 250,000 1,000EDP 1,244,142 1,000Valuable Papers and Records 10,000,000 10,000Boiler and Machinery - Property Damage 100,000,000 10,000School Leaders Errors and Admissions 31,000,000 30,000Public Employees' Faithful Performance

Blanket Position Bond 250,000 1,000Public Officials:

Board Secretary/Business Administrator 115,000Assistant Board Secretary/Assistant Business Administrator 115,000Treasurer 315,000

Flood Insurance 75,000,000 (Pool Agg) 10,000Earthquake Insurance 50,000,000 (Pool Agg) 10,000Athletic Accident (Base Policy) 25,000 80% Co-Ins.Athletic Accident (Cat. Policy) 1,000,000 25,000Environmental Liability 1,000,000 50,000


Holmdel Township School DistrictInsurance Schedule As of June 30, 2020

(Unaudited)

126

Single Audit Section

K-1

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed

in Accordance with Government Auditing Standards

Independent Auditors’ Report The Honorable President and Members of the Board of Education Holmdel Township School District County of Monmouth Holmdel, New Jersey We have audited, in accordance with the auditing standards generally accepted in the United States of America; audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey; and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Holmdel Township School District, in the County of Monmouth, New Jersey (the “District”) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated February 2, 2021. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be



127


K-1 Page 2

material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and the audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. February 2, 2021 Cranford, New Jersey

Michael Andriola, CPA Licensed Public School Accountant No. 2429

128

K-2 Page 1

Report on Compliance For Each Major Federal and State Program and

on Internal Control Over Compliance Required by the Uniform Guidance and New Jersey OMB Circular 15-08

Independent Auditors’ Report

The Honorable President and Members of the Board of Education Holmdel Township School District County of Monmouth Holmdel, New Jersey Report on Compliance for Each Major Federal and State Program We have audited the Holmdel Township School District’s, in the County of Monmouth, New Jersey (the “District”) compliance with the types of compliance requirements described in the OMB Compliance Supplement and the New Jersey State Aid/Grant Compliance Supplement that could have a direct and material effect on each of the District’s major federal and state programs for the year ended June 30, 2020.The District’s major federal and state programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

Management’s Responsibility Management is responsible for compliance with the federal and state statutes, regulations, and the terms and conditions of its federal and state awards applicable to its federal and state programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of the District’s major federal and state programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the audit requirements as prescribed by the Office of School Finance, Department of Education, State of New Jersey; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance); and New Jersey OMB’s Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Those standards, the Uniform Guidance and New Jersey OMB Circular 15-08 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal and state program occurred.



129

The Honorable President and Members K-2 of the Board of Education Page 2 Holmdel Township School District

An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our unmodified opinion on compliance for each major federal and state program. However, our audit does not provide a legal determination of the District’s compliance. Unmodified Opinion on Major Federal and State Programs In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal and state programs identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs for the year ended June 30, 2020. Report on Internal Control Over Compliance Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the District’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal and state program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal and state program and to test and report on internal control over compliance in accordance with the Uniform Guidance and New Jersey OMB Circular 15-08, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal or state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal or state program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal or state program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

130

The Honorable President and Members K-2 of the Board of Education Page 3 Holmdel Township School District Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance and New Jersey OMB Circular 15-08. Accordingly, this report is not suitable for any other purposes.

February 2, 2021 Cranford, New Jersey Michael Andriola, CPA Licensed Public School Accountant No. 2429

131

K-3Schedule A

Balance June 30, 2019 Federal Grant or Unearned Revenue/ CFDA State Project Grant Award (Accounts Cash Budgetary (Accounts Due to

Federal Grantor/Pass-Through Grantor/Program Number Number Period Amount Receivable) Received Expenditures Adjustments Receivable) Grantor

U.S. Department of Health and Human Services- Services Passed-Through State Department of Education

General Fund: Medical Assistance Program-SEMI/MAC 93.778 100-054-7540-211 7/1/19-6/30/20 $ 24,093 $ 24,093 $ (24,093)Total U.S. Department of Health and Human Services $ 24,093 $ (24,093)

U.S. Department of Education–Passed-Through Department of Education

Special Revenue Fund:I.D.E.A. Part B - Basic Flow-Through 84.027 100-034-5065-016 7/1/19-9/30/20 720,267 496,279 (689,337) $ (193,058)I.D.E.A. Part B - Basic Flow-Through 84.027 100-034-5065-016 7/1/18-6/30/19 728,847 $ (285,074) 330,404 (45,330)I.D.E.A. Part B, Preschool 84.173 100-034-5065-020 7/1/19-9/30/20 29,573 20,486 (29,573) (9,087)I.D.E.A. Part B, Preschool 84.173 100-034-5065-020 7/1/18-6/30/19 29,320 (17,846) 17,846

Subtotal of IDEA Special Education Cluster (302,920) 865,015 (764,240) (202,145)

Title I, Part A 84.010A 100-034-5064-194 7/1/19-9/30/20 159,825 74,530 (149,911) (75,381)Title I, Part A 84.010A 100-034-5064-194 7/1/18-6/30/19 170,645 (105,736) 119,515 (13,779)

Subtotal of Title I, Part A (105,736) 194,045 (163,690) (75,381)

Title II, Part A 84.367 100-034-5063-290 7/1/19-9/30/20 42,246 15,248 (32,917) (17,669)Title II, Part A 84.367 100-034-5063-290 7/1/18-6/30/19 41,637 (11,373) 25,047 (13,674)Title II, Part A 84.367 100-034-5063-290 7/1/17-6/30/18 44,024 (16,233) 16,201 $ 31

Subtotal of Title II, Part A (27,606) 56,496 (46,591) 31 (17,669)

Title III - Immigrant 84.365 100-034-5064-187 7/1/17-6/30/18 5,034 (2,898) 2,898 Subtotal of Title III, Immigrant (2,898) 2,898

Title IV 93.658 100-034-5064-187 7/1/19-9/30/20 10,000 1,248 (1,694) (446)Title IV 93.658 100-034-5064-187 7/1/18-6/30/19 10,248 (4,208) 4,208 (2,603) (2,603)Title IV 93.658 100-034-5064-187 7/1/17-6/30/18 10,000 (3,268) 3,268

Subtotal of Title IV (7,476) 8,724 (4,297) (3,049)

Total Special Revenue Fund $ (446,636) $ 1,127,178 $ (978,818) $ 31 $ (298,244) $ -

Total Federal Awards $ (446,636) $ 1,151,271 $ (1,002,911) $ 31 $ (298,244) $ -

The accompanying Notes to Schedule of Expenditures of Awards and Financial Assistance are an integral part of this schedule

Balance June 30, 2020

Holmdel School District

Schedule of Expenditures of Federal Awards


132

K-4Schedule B

Repayment Grant or Unearned Revenue/ of Prior Memo

State Project Grant Award (Accounts Due to Cash Budgetary Years' Unearned (Accounts Due to Budgetary Budgetary State Grantor/Program Title Number Period Amount Receivable) Grantor Received Expenditures Balances Revenue Receivable) Grantor Receivable Expenditures

State Department of EducationGeneral Fund:

Non-Public Transportation Aid 495-034-5120-014 7/1/19-6/30/20 27,056$ (27,056)$ (27,056)$ 27,056$ Non-Public Transportation Aid 495-034-5120-014 7/1/18-6/30/19 29,000 (29,000)$ 29,000$ Transportation Categorical Aid 495-034-5120-014 7/1/19-6/30/20 721,124 651,941 (721,124) (69,183)$ 721,124 Transportation Categorical Aid 495-034-5120-014 7/1/17-6/30/18 721,124 (72,112) 72,112 Special Education Categorical Aid 495-034-5120-089 7/1/19-6/30/20 1,722,321 1,557,084 (1,722,321) (165,237) 1,722,321 Special Education Categorical Aid 495-034-5120-089 7/1/18-6/30/19 1,479,185 (135,055) 135,055 Security Categorical Aid 495-034-5120-084 7/1/19-6/30/20 139,118 125,771 (139,118) (13,347) 139,118 Security Categorical Aid 495-034-5120-084 7/1/18-6/30/19 139,118 (13,912) 13,912 Extraordinary Special Education Aid 495-034-5120-044 7/1/19-6/30/20 725,149 (725,149) (725,149) 725,149 Extraordinary Special Education Aid 495-034-5120-044 7/1/18-6/30/19 819,046 (819,046) 819,046 Reimbursed TPAF Social Security Contributions 495-034-5094-003 7/1/19-6/30/20 1,860,239 1,860,241 (1,860,241) 1,860,241 TPAF-Post Retirement Medical (Noncash 495-034-5094-001 7/1/19-6/30/20 1,944,195 1,944,195 (1,944,195) 1,944,195 TPAF-Pension Contributions (Noncash Assistance) 495-034-5094-002 7/1/19-6/30/20 5,240,677 5,240,677 (5,240,677) 5,240,677 TPAF-Long-Term Disability Ins (Noncash 495-034-5094-004 7/1/19-6/30/20 3,772 3,772 (3,772) 3,772

Total General Fund (1,069,125) 12,452,806 (12,383,653) - - (752,205) (247,767) 12,383,653 10-141

Special Revenue Fund:Non Public Auxiliary Services (Ch. 192):

Compensatory Education 100-034-5120-067 7/1/19-6/30/20 82,173 - 73,666 (82,173) (8,507) 82,173 Transportation 100-034-5120-067 7/1/19-6/30/20Transportation 100-034-5120-067 7/1/18-6/30/19 5,950 5,950$ (5,950)$ ESL 100-034-5120-067 7/1/19-6/30/20 1,489 - 1,312 (1,489) (177) 1,489 Home Instruction 100-034-5120-067 7/1/19-6/30/20 575 (575) (575) 575 Home Instruction 100-034-5120-067 7/1/18-6/30/19 1,945 (1,945) 1,945

Non Public Handicapped Services (Ch. 193):Examination and Classification 100-034-5120-066 7/1/19-6/30/20 117,059 105,355 (65,392) 51,667$ (11,704) 65,392 Examination and Classification 100-034-5120-066 7/1/18-6/30/19 104,678 14,939 (14,939) Corrective Speech 100-034-5120-066 7/1/19-6/30/20 15,494 13,945 (12,067) 3,427 (1,549) 12,067 Supplemental Instruction 100-034-5120-066 7/1/19-6/30/20 85,805 77,224 (73,630) 12,175 (8,581) 73,630 Supplemental Instruction 100-034-5120-066 7/1/18-6/30/19 79,296 748 (748)

Non Public Nursing Services 100-034-5120-070 7/1/19-6/30/20 127,264 127,264 (117,255) 10,009 117,255 Non Public Nursing Services 100-034-5120-070 7/1/18-6/30/19 134,345 157 (157) Non Public Textbooks Aid 100-034-5120-064 7/1/19-6/30/20 69,156 69,156 (68,947) 209 68,947 Non Public Textbooks Aid 100-034-5120-064 7/1/18-6/30/19 73,959 137 (137) Non Public Technology Aid 100-034-5120-373 7/1/19-6/30/20 47,232 47,232 (47,208) 24 47,208 Non Public Technology Aid 100-034-5120-373 7/1/18-6/30/19 49,860 5 (5) Non Public Security Aid 100-034-5120-509 7/1/19-6/30/20 196,800 196,800 (186,804) 9,996 186,804 Non Public Security Aid 100-034-5120-509 7/1/18-6/30/19 207,750 15 (15)

Total Special Revenue Fund (1,945) 21,951 713,899 (655,540) (21,951) (9,259) 87,507 (21,834) 655,540

Debt Service Fund:Debt Service Aid 100-034-3800-020 7/1/19-6/30/20 723,575 723,575 (723,575) 723,575

Total Debt Service Fund 723,575 (723,575) 723,575

Total State Financial Assistance (1,071,070)$ 21,951$ 13,890,280$ (13,762,768)$ (21,951)$ (761,464)$ 87,507$ (269,601)$ 13,762,768$

State Financial Assistance Not Subject to Single Audit Determination:TPAF-Post Retirement Medical (Noncash Assistance) 495-034-5094-001 7/1/19-6/30/20 1,944,195 (1,944,195) TPAF-Pension Contributions (Noncash Assistance) 495-034-5094-002 7/1/19-6/30/20 5,240,677 (5,240,677) TPAF-Long-Term Disability Ins (Noncash Assistance) 495-034-5094-004 7/1/19-6/30/20 3,772 (3,772) Total State Financial Assistance Subject to Single Audit Determination (1,071,070)$ 21,951$ 6,701,636$ (6,574,124)$ (21,951)$ (761,464)$ 87,507$ (269,601)$ 13,762,768$


The accompanying Notes to Schedule of Expenditures of Awards and Financial Assistance are an integral part of this schedule


Holmdel School District

Schedule of Expenditures of State Financial Assistance


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K-5 p. 1


Notes to Schedules of Expenditures of

Federal Awards and State Financial Assistance


1. General

The accompanying schedules of expenditures of federal awards and state financial assistance present the activity of all of all federal awards and state financial assistance programs of the District. The Board of Education is defined in Note 1 to the board’s basic financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies, are included on the schedules of expenditures of federal awards and state financial assistance.

2. Basis of Accounting

The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the enterprise funds, which are presented using the accrual basis of accounting and those recorded in the special revenue fund, which are presented using the budgetary basis of accounting. These basis of accounting are described in Note 1 to the District's basic financial statements. The information in these schedules are presented in accordance with the requirements of 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Therefore, some amounts presented in this schedule may differ from amounts presented, or used in the preparation of, the basic financial statements.

3. Relationship to Basic Financial Statements

Amounts reported in the accompanying schedules agree with amounts reported in the District’s basic financial statements. The basic financial statements present the general fund and special revenue fund on a GAAP basis. Budgetary comparison statements or schedules (RSI) are presented for the general fund and special revenue fund to demonstrate finance-related legal compliance in which certain revenue is permitted by law or grant agreement to be recognized in the fiscal year, whereas for GAAP reporting, revenue is not recognized until the subsequent year or when expenditures have been made.

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3. Relationship to Basic Financial Statements (Continued)

The general fund is presented in the accompanying schedules on the modified accrual basis of accounting with the exception of the revenue recognition of the last two state aid payments in the current year, which is mandated pursuant to N.J.S.A. 18A:22-44.2. For GAAP purposes, those payments are not recognized until the subsequent year due to the state deferral and recording of the last two state aid payments in the subsequent year. The special revenue fund is presented in the accompanying schedules on the grant accounting budgetary basis, which recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not. The special revenue fund also recognizes the last state aid payments in the current budget year, consistent with N.J.S.A. 18A:22-44.2.

As a result, the federal account receivable balance in the special revenue fund on the budgetary basis differs from the GAAP basis as follows:

Accounts Receivable

Budgetary Basis

Less: Encumbrances

GAAP Basis

Federal $298,244 $7,313 $290,931

Additionally, on the budgetary basis, the special revenue fund will recognize an accounts receivable balance and an amount due back to state for non-public entitlement amounts not received at year end. However, on the GAAP basis, the accounts receivable balance and the amount due back to state is impacted strictly by the amount of non-public entitlement funds received and expended, respectively at year end. As a result, the state accounts receivable and the state payable balances in the special revenue fund on the budgetary basis differs from the GAAP basis as follows:

Accounts

Receivable

Budgetary Basis

Less: State Aid Not Received

At June 30, 2020

GAAP Basis

State $31,093 $21,834 $9,259

Accounts Payable

Budgetary Basis

Less: State Aid Not Received

At June 30, 2020

GAAP Basis

State $87,507 $21,834 $65,673

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3. Relationship to Basic Financial Statements (Continued)

The net adjustment to reconcile from the budgetary basis to the GAAP basis is ($26,688) for the general fund and $84,007 for the special revenue fund. See note to required supplementary information for a reconciliation of the budgetary basis to the modified accrual basis of accounting for the general and special revenue funds (C-3). Federal and State award revenues are reported in the District's basic financial statements on a GAAP basis as follows:

Federal State Total

General Fund $ 24,093 $ 12,356,963 $ 12,381,056 Special Revenue Fund Debt Service Fund

971,505 746,860 723,575

1,718,365 723,575

Total financial award revenues $ 995,598 $ 13,827,398 $ 14,822,996

4. Relationship to Federal and State Financial Reports

Amounts reported in the accompanying schedules agree with the amounts reported in the related federal and state financial reports.

5. Other

TPAF Social Security Contributions represent the amount reimbursed by the State for the employer’s share of Social Security for TPAF members for the year ended June 30, 2020.

The post-retirement pension, medical and disability insurance benefits received on behalf of the District for the year ended June 30, 2020 amounted to $7,188,644. Since on-behalf post retirement pension, medical and disability insurance benefits are paid by the State directly, these expenditures are not subject to a single audit in accordance with New Jersey OMB Circular 15-08, however they are reported on the Schedule of Expenditures of State Financial Assistance, as directed by the funding agency.

6. Indirect Costs

The District did not use the 10% de minimis indirect cost rate.

7. Adjustments

The adjustments presented on the schedule of federal awards represent cancelation of prior year accounts receivable balances.

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p. 1


Schedule of Findings and Questioned Costs (continued)


Part II- Schedule of Financial Statement Findings

Financial Statements Section

Type of report the auditors issued on whether the Financial statements were prepared in accordance With GAAP:

Unmodified

Internal control over financial reporting:

Are any material weaknesses identified? Yes X No

Are any significant deficiencies identified? Yes X None Reported

Is any noncompliance material to financial statements noted?

Yes

X

No

Federal Awards

Internal control over major federal programs:

Are any material weaknesses identified? Yes X No

Are any significant deficiencies identified? Yes X None Reported Type of auditors’ report issued on compliance for major

federal programs:

Unmodified Any audit findings disclosed that are required to be reportedin accordance with 2 CFR 200.516(a)?

Yes

X

No Identification of major programs:

CFDA Number(s) FAIN Number Name of Federal Program or Cluster

(Special Education Cluster)

84.027 100-034-5065-016 84.173 100-034-5065-020

IDEA Part B - Basic IDEA Preschool

Dollar threshold used to distinguish between Type A and Type B programs:

$750,000

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p. 2




Part I- Summary of Auditor’s Results (continued)

Auditee qualified as low-risk auditee? X Yes No

State Financial Assistance Section

Internal control over major state programs:

Are any material weaknesses identified? Yes X No Are any significant deficiencies identified?

Yes

X

None reported

Type of auditors’ report issued on compliance for major state programs:

Unmodified Any audit findings disclosed that are required to be reported in accordance with NJOMB Circular 15-08?

Yes

X

No Identification of major state programs:

GMIS/Program Number Name of State Program or Cluster

495-034-5120-089 495-034-5120-084

State Aid Cluster: Special Education Categorical Aid Security Aid

Dollar threshold used to distinguish between Type A and Type B programs:

$750,000

Auditee qualified as low-risk auditee? X Yes No

No financial statement findings noted that are required to be reported under Government Auditing Standards.

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Part II- Schedule of Financial Statement Findings

No federal award or state financial assistance program internal control over compliance or compliance findings or questioned costs were noted that are required to be reported under Government Auditing Standard.

139

K-7


Summary Schedule of Prior Year Audit Findings


No prior year findings were noted.

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